Streamlining risk ops: tools for today’s challenges

Operations teams in financial institutions face mounting challenges, navigating complex regulatory demands alongside the pressures of turbulent economic and political times. Strengthening operational resilience has become a top priority, reflected in its 8.0 score out of 10 on KPMG's latest Financial Services Regulatory Barometer – a clear signal of its critical role in today’s environment.

Adding to these pressures are outdated systems and siloed data, which slow down decision-making and make compliance and scalability feel like opposing goals. It’s a common struggle: 56% of financial experts highlight legacy systems as a major roadblock to harnessing the potential of big data analytics.

This is where tools like Elucidate’s Risk Module Builder step in, offering a way to simplify operations, enhance compliance, and support growth. But before exploring how it works, let’s take a closer look at the broader approaches to risk and data operations shaping the market today.

1. The market right now

The financial services system is shifting at breakneck speed, with institutions under growing pressure to navigate tighter regulations and outpace market disruptors with more innovative tech approaches. Regulatory technology (RegTech) investments are surging, and the sector is expected to grow 24.2% CAGR between 2022 to 2030, as firms seek to reduce costs and improve efficiency.

At the same time, banks are prioritizing scalability, with McKinsey reporting that financial institutions must apply a “full set of levers across their entire operations cost base” with agility as their primary goals. However, many organizations need help with the inefficiencies of their legacy systems.

According to FinTech Futures (2021)

2. Approaches to risk and data operations

The risk and data operations ecosystem is diverse, with institutions employing a range of strategies to tackle compliance and operational challenges. Here’s a look at the most common approaches:

  1. In-house solutions

Some institutions rely on custom-built systems developed internally by their IT and compliance teams. These in-house solutions are patched up rather than overhauled, making compliance costs a “black box” for financial institutions, as it becomes impossible to track what area of the operations are, and aren’t, working, according to a Thompson Reuters survey of over 800 compliance senior practitioners. While these solutions offer flexibility in being able to customize the solution to the organization, they often come with high development and maintenance costs. Moreover, they can quickly become outdated, especially in fast-evolving regulatory environments.

  1. Traditional legacy systems

Many organizations continue to use established risk management systems that, while providing a baseline level of functionality, are often rigid and unsuitable for scaling or adapting to new requirements. A common drawback is the creation of data silos, which further complicate reporting and decision-making. Highlighting the extent of the issue, 56% of respondents identified data integrity and quality problems in legacy systems as significant barriers to real-time business insights in financial organizations. 

  1. Specialized tools approach

Deploying specialized tools for functions like anti-money laundering (AML) compliance or fraud detection can effectively address targeted needs. KPMG notes that many compliance functions remain overly risk-averse, often preoccupied with resolving past issues. This leaves limited capacity to support new initiatives or align with broader business goals. As a result, standalone tools that aren’t seamlessly integrated into existing processes can unintentionally position compliance as a "business inhibitor," limiting its potential to support growth.

On the risk management side, a lack of system integration and a failure to prioritize forward-thinking scalability can lead to fragmented workflows and inefficiencies. This often creates a patchwork of systems that fail to provide a unified data source, increasing the likelihood of key threats being overlooked in the disorganized information.

  1.  Integrated platforms for technology and operations

Forward-thinking institutions, including multinational banks and fintech companies, are adopting integrated platforms to unify risk management, compliance, and data operations. These systems centralize processes, enabling automation and real-time insights. Despite the advantages, some institutions hesitate to adopt these platforms due to perceived costs and implementation complexities.

3. Why current risk operations systems aren’t fit for purpose

Despite the variety of approaches, significant challenges persist across the board:

  • Siloed data: Many systems store critical information in separate databases, leading to inefficiencies and delayed decision-making, with a recent Vinciworks survey revealing 43% of compliance professionals admitted a reliance on outdated spreadsheets. 
  • Manual workflows: A reliance on spreadsheets and other manual processes increases error rates and consumes valuable time, further exacerbating inefficiencies. According to PwC, over 80% of manual business processes are still using spreadsheets for processing complex data, opening financial institutions up to greater scrutiny from regulators.
  • Inflexibility: Legacy systems often lack the adaptability to keep pace with evolving compliance and operational demands, limiting their scalability.

4. The Risk Module Builder Approach

Elucidate’s Risk Module Builder is your key to tackling operational inefficiencies and scaling your compliance processes with ease. Designed exclusively for financial crime risk management, it bridges gaps in data, workflows, and decision-making. Here's how it works:

  1. Centralized data models

Say goodbye to siloed information and fragmented workflows. Our Risk Module Builder unifies your risk and compliance data into a single, easy-to-access framework. With everything centralized, your team can make confident, real-time decisions without digging through disconnected systems. Even better, you don’t need a technical background to get started – our platform is designed for simplicity, ensuring your entire team can hit the ground running.

  1. Process automation

Reclaim valuable time and resources by automating your manual tasks, such as customer due diligence (CDD), KYC and KYB processes.Streamlined workflows ensure adherence to complex regulations without overwhelming teams. Bain & Company estimates that augmenting business processes with automation can reduce operational costs by up to 30%.  By reducing human error and streamlining workflows, the Risk Module Builder accelerates your reporting and decision-making processes, letting you focus on analysis, and strategic growth initiatives. 

  1. Customizability without complexity

Unlike generic, multi-purpose platforms, Elucidate is built for financial crime risk, offering customization that fits your institution's unique needs without slowing down implementation. Whether you’re optimizing workflows or aligning compliance with growth targets, our platform adapts seamlessly. This customizability translates into rapid time-to-value – you’ll see meaningful improvements in your processes sooner than you’d expect. With Elucidate’s Risk Module Builder, you’re not just implementing another tool – you’re transforming how your organization approaches compliance, operations, and risk.

Your next steps

Scaling data ops doesn’t have to hold back your growth. Start by asking yourself:

  • Are your data silos slowing down reporting and decision-making?
  • Which processes could benefit from automation?
  • Do your current tools support both compliance and strategic expansion?

By addressing these questions and investing in the right technology, you can transform risk reporting from a compliance necessity into a growth enabler.

Ready to get started? Elucidate’s Risk Module Builder is designed to scale with your organization, supporting compliance and growth without adding operational stress.