ERM Solutions

ERM Software

ERMX is a tool for financial institutions to assess enterprise risk easily and electronically, document business risk management controls, track strategy execution and measure ongoing risks through a key risk indicator dashboard. This tool was designed to make implementation of an ERM solution from front-line management to the Board of Directors seamless and simple.

The four ERMX modules are outlined below:

ERM Risk Assessment Module

Strategy Prioritization Module

Business Risk Control Module

KRI Dashboard Module

ERMX Software Demo
 

ERM Risk Assessment Module

Assess your financial institution enterprise risk easily and electronically with the ERMX risk assessment tool. This online tool utilizes a risk map, which identifies categories of possible external and internal business risks or threats that could stop or slow strategy execution. ERMX will introduce your organization to a list of key questions for each type of business risk your financial institution may face. You have the opportunity to assign categories of questions as they apply to different senior managers and front-line managers. These individuals will log in online and answer the ERM risk assessment questions that are applicable to them on-line any time.

ERM risk assessment questions ask the manager to assess risk at two levels. First, the manager is asked whether a potential threat to the organization is material or not to the company in today’s environment. We call this “gross risk” because at this level we are not considering the types of controls or checks and balances the institution may have in place when assessing the risk. Secondly, the manager is asked whether the methods the bank uses to manage this risk reduce the likelihood of a negative encounter with this risk to an acceptable level or not. At this level we assess what we call the “residual risk”. Residual risk measures the likelihood that an event will negatively impact strategy execution considering management’s control structure.

These results are tracked throughout the process and are always available for management review at the department level or at the company level in summary or in detail. The results span the organization and address in one location all significant types of threats the organization may face that could stop or slow strategy execution. Summary reports are generated both in graphical and numerical formats.

The results of this analysis quickly reveal and documents for management whether there are high levels of uncontrolled business risk that could impair strategy execution for the organization. Chief Risk Officers and Enterprise Risk Management committees or other priority setting decision makers are able to use this information to allocate resources and reduce or eliminate unacceptable levels of risk. The results of this tool are utilized to track and monitor strategy execution results and priorities in the Strategy Prioritization Module discussed further here.

 

Strategy Prioritization Module

Perhaps the most important element in managing enterprise risk is understanding the financial institution’s strategic priorities. This module helps you track two types of priorities.

The first are strategic action steps identified during the organization’s strategic planning phase. These priorities are of little to no value if the action required to make these priorities a reality are not assigned and tracked. A unmonitored strategic action item is unlikely to get executed by management. In other words, if the Board of Directors or the Management Committee and senior management are not asking for it, then it will not get done. This tool will provide a simple method for allocating strategic priorities to your management team. The tool provides for convenient accountability by tracking the progress of the action item. Strategic progress across the organization is monitored in this way and summarized for senior management and the Board or Management Committee in one simple location. If you need help with creating a useable strategic plan, check out some of our Free online resources here. [connect to the Free Resource tab].

Through the ERMX Risk Assessment Module [link back to first section] we were able to assess key risks or threats that could impair strategy execution. These risks have the opportunity to throw your future plans for the organization off course or stop progress all together. The strategy prioritization module allows the user to not only track strategic priorities, but it also allows the user to prioritize and assign to your management team action items required to reduce or eliminate these identified risks. Risk by definition means “uncertainty”. These uncertain threats with the highest likelihood of occurrence must be dealt with through action by your management team. In the same fashion that strategic priorities are assigned and tracked, these potential threats to your strategy are each prioritized and assigned to management. Management will utilize this Strategy Prioritization Module to report to management where they stand in taking action to reduce or eliminate unnecessary business risk. These priorities are typically identified during the risk assessment phase. See more about the risk assessment phase here. [Connect back to the top of this page].

The ERMX Strategic Prioritization Module allows you to identify various types of priorities, assign action steps to a specific responsible person, next steps as well as a due date for each of the “next steps” required to make this action item a reality.

This online application will also allow you to set up automatic alerts when action items are completed or nearing a past due date. The ERMX Strategic Prioritization Module also allows the end user to document that status of each of their action items. Ultimately, this information is updated in such a way that reporting can be printed and served up directly for use by senior management or the Board of Directors.

 

Business Risk Control Module

Management’s assessment of business risk is improved greatly when the controls management is using to mitigate business risks are documented. The documentation of these controls allows other managers as well as senior management to evaluate whether the business process used to mitigate an existing control is adequate or not. This ERMX module allows the organization an opportunity to have a second opinion on whether a particular business risk can be adequately controlled by the checks and balances a particular manager has in place. This module also allows managers and senior management to determine whether or not they agree with the level of risk the organization faces given the controls that are in place.

The Business Risk Control Module allows managers to document for each type of internal or external threat or business risk what type of business process is in place to mitigate this specific business risk. This documentation provides a significant level of understanding and communication to senior management as well as the Board of Directors on exactly the steps front line management is taking to minimize certain business risks. If deficiencies are determined to exist, then business strategies and priorities can be adjusted to ensure that business processes are improved to reduce the related business risk to an acceptable level.

Imagine the clarity and transparency created in a financial institution where its key business practices for controlling all types of business risk attributable to a financial institution are documented and communicated. The Business Risk Control Module allows senior management to select certain types of business risk for the organization as a whole and immediately receive a summary of the business processes used to control that risk throughout the organization. Alternatively, senior management can view risk and related controls for an entire department, or only a certain risk in a specific department or processes managed by a specific individual.

A key factor in managing enterprise risk is knowing whether your management team understands the business risk they manage and whether or not they understand how they effectively manage this risk to an acceptable level. The Business Risk Control Module will walk your management team through the types of risks they should address on a routine basis. This makes documenting business risk management processes or controls for your management team simple and straightforward.

 

KRI Dashboard Module

Priorities change rapidly in our banks, credit unions and mortgage companies. Enterprise risk management tools are designed to help your management team have a clear understanding of existing strategies, risks and resulting priorities. When priorities change, then management has a clear understanding of what will probably not get done or get done more rapidly as resources are reallocated. The ERMX KRI Dashboard Module is designed to help your financial institution understand what is changing throughout the organization through simple ongoing and measurable facts.

Your end users will have the opportunity to select from over 200 possible options of measurable facts from every conceivable banking process. They have the opportunity to determine if they will be reporting the results from this business process hourly, daily, weekly, etc.