<img src="https://ws.zoominfo.com/pixel/pIUYSip8PKsGpxhxzC1V" width="1" height="1" style="display: none;">

Strategic Risks

author Ncontracts
1 min read
Nov 13, 2018

Strategic risks are threats that come from company decisions that thwart the firm’s long-range goals. Strategic risks have the largest impact on an organization. Failing to address these risks can reduce the lifespan of a financial institution.

Strategic positioning risks are threats of loss that come from marketing plans that do not create a distinct and positive impression for the consumer. Strategic execution risks are those that involve having the appropriate infrastructure, developing advantageous procedures, and hiring the right employees and vendors to achieve company goals. Strategic consequence risks are risks that come from the processes put in place to avoid other risks.

FIs need data on all their business processes, equipment, IT infrastructure, software solutions, employees, vendors, and customers to assess strategic risks. Risk management software can be used to compile and sort the data. It is also used to create reports for further analysis. These reports can be relayed to decision-makers to assist them in strategic planning.

Strategic risks can be difficult to discern because they are based on what might happen in the long-term. The near future is somewhat unknown, but what will happen in the years ahead is even harder to assess. Strategic risks must be assessed nonetheless if the company is to have a secure and stable future. Strategic risk assessment can be accomplished in several ways with the help of risk management software.

Risk management software can play a vital role in strategic risk assessment. The software creates a real-time view of the institution’s risk profile. It can track both financial and non-financial risks within one application. Controls can be monitored through the software constantly so that the bank can strategize based on up-to-date information. It makes communication and reporting easier, alerting management of risks more easily and accurately.

Banks must assess their risks both in the short and long term. When they do, they can take advantage of opportunities to mitigate those risks to be more profitable and achieve their aims.

 

Related: Creating Reliable Risk Assessments

Subscribe to the Nsight Blog

All Topics Risk & Compliance Product Insight Banks Lending Compliance Credit Unions Risk Management Fair Lending Nfairlending Cluster: Risk Management Compliance Lending Compliance Management Integrated Risk Blog Nrisk Regulatory Compliance Management News & Updates HMDA Risk Mortgage Lenders Ncomply Vendor Management Business Resiliency CRA Lending Compliance Blog Vendor CFPB Ncontinuity Third-Party Vendor Management Business Continuity Cybersecurity Fintech NVendor Strategic Planning Ncyber Ntransmittal Audits & Findings Company Culture OCC Regulatory Updates Audit Nverify Regulatory Compliance Exams FDIC Compliance Management Findings Nfindings NCUA Contract Management Employee Intranet Contract FRB Business Continuity Management FFIEC Findings Management Ncontracts manager Third-Party Vendors Vendor Risk Enterprise Risk Management ABA Bank Access Control Audit Findings Board Portal Call Report Due Diligence Efficiency Employee Engagement Exam findings FIEC Inc. 5000 Internal Audit Management Nboardportal Verify Wealth Management
Risk Management Software
Risk Management

Risk Management Software

Nov 12, 2018 1 min read
Reputational Risk
Risk Management

Reputational Risk

Nov 12, 2018 1 min read
Creating Value with A Culture of Risk Management
Risk Management

Creating Value with A Culture of Risk Management

May 30, 2019 3 min read