Compliance costs have soared for banks and corporates alike, compared to pre-crisis compliance spending. But there are huge benefits for corporates who rethink their global risk management strategy. IBM, one of the world's largest tech firms providing risk and compliance solutions for corporates and banks, recently published a report – Empowering your risk management strategy – containing several case studies showing how organisations are implementing compliance, risk and governance software and what kind of benefits and return on investment they can expect. Most case studies in the report are of banks but one from a corporate perspective shows that non-banks can benefit hugely from simplifying their risk management processes.

Cruise control for risk management

Continental is a leading German auto supplier, providing tyres, breaking systems and interior electronics to the automotive and transportation industries. The organisation, which employs 220,000 worldwide and had a turnover of €40.5 billion in 2016, needed to gain visibility and control of its key risks. The challenge it faced was to gain insight into areas of exposure across its subsidiaries worldwide, and to come up with effective ways to mitigate the threats. Using the IBM solution for compliance, governance and risk (IBM OpenPages), the company was able to start carrying out broad-scale risk assessments across its worldwide operations and took effective steps to reduce exposure.

Six risk processes, one system

According to IBM, the results of this implementation were that Continental saw a 75 per cent reduction in its risks assessed at corporate level, as minor threats were being addressed lower down at the subsidiary level. The auto firm was also able to consolidate six risk management processes and four systems into a single solution.

As part of the IBM case study report, Sebastian Witte, at Continental's corporate controlling department said: “We assessed global risk exposure twice a year in different legacy systems and processes by asking each reporting unit to evaluate its own risks, and report them to a central controlling function. We saw several opportunities for improvement in our existing process, especially concerning efficiency and standardization. In addition, we wanted to integrate the existing tools into one single solution. Building on that, we aimed to further improve our risk management culture via the implementation of a new solution.”

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CTMFile take: Although the IBM compliance/regtech report is mainly geared towards banks, the example of Continental shows that large non-bank organisations can also benefit from a rethink of their compliance and risk management processes.