In this article, we share some risk management tips on how to keep ahead in 2022. As we approach the second quarter of 2022 we share some key areas that lenders can consider as they review and develop their risk management processes.
In our experience clients are facing ever-increasing threats of fraud, frail supply chains, and a potential increase in insolvency levels. Reviewing client plans, constantly analysing industry sectors, and employing technology will help lenders reduce risk.
Reviewing Original Plans
A detailed risk management plan provides a useful point of reference for executives to re-evaluate as the year goes on to account for any changes in the market or economic landscape.
Having a clear view of a client's growth plans and overall portfolio is similarly valuable, especially when lenders assess whether they want to retain a client, take on a new client, or manage away a distressed client.
Constantly evaluating the market landscape helps lenders to spot new challenges and remain competitive. It is important to understand and forecast what specific industries may be facing and determine how your clients will tackle the challenges. Creating a detailed industry summary and comprehensive risk framework for the relevant sectors in a lender's portfolio helps to minimise risk. A more widespread industry analysis that covers all industries that indirectly affect clients and their customers is also a valuable exercise for risk managers to complete. Once lenders identify what issues to be cautious of, they can set different risk appetites and adopt additional risk policies and processes.
Development Of Adoption Plan
Adopting technology-based solutions such as EQ Riskfactor and KYC Net for risk and fraud management can aid the identification and risk monitoring process. Technology provides data-based recommendations for both immediate and future prevention strategies. Despite restrictions being lifted, minds must still be open to hybrid working methods, and further implementation of digitalisation and data processing should be at the heart of any future risk management plans.
Time should be made with senior stakeholders and tech partners to truly understand objections from clients or internal stakeholders and develop an adoption strategy to tackle both. Implementing any new technology to internal operations should be as efficient as possible and communicated to clients.
What remains certain is that forecasting ahead is as difficult as ever. The best way to combat this is by staying close to clients and constantly checking progress against plans, using in-depth industry analysis, staying adaptable and using technology to maximise competitive advantage.
Read Navigating 2022 And Beyond
Volume 4 of the Receivables Finance Global Outlook is now out.
Find out how technology can speed up and optimise risk processes to help lenders realise their 2022 growth ambitions.