Importance of risk communication
Financial crime is an attempt against financial services in an organization to steal or manipulate established rules. Financial crimes vary according to the industry, jurisdiction risk, products, and services an organization offers. Also, the risk of financial crime is determined by how secure the organization’s control procedures are. To effectively help manage financial crime risk, the leadership should communicate to other staffs the importance of financial crime controls and the implications of not implementing.
Importance of risk communication
Some organizations have that reactive mindset that as long as everything is operating smoothly, there is no need for procedures and policies. Suck kind of a mentality overlooks the importance of risk management practices. Well-defined policies, procedures, and processes can help identify gaps, risk, and control points. For example, an organization should have a documented system on how to terminate an employee from accessing IT. The leadership should ensure there is adequate training to communicate the requirements, purpose, and objectives of the controls to other staffs. A clear understanding of crime mitigation policies and procedures is vital in an organization.
Management of risk information
Risk mitigation involves reviewing and redefining current policies and procedures, which may involve internal auditors or risk management teams. Auditors determine organizational compliance by examining what is in place. As such, policies, processes, and procedures are viewed as evidence of an organizations commitment to effective risk management. Executives can only understand an organizations risk point by well managing the communication of risk information.
Conclusion
The common understanding that policies, procedure, and processes are reference documents understates their value. To understand their real function, the employees must understand their exact meaning and how they function. An understanding of these operational controls makes the running of an organization clearer.