Untitled Quiz

Risk and Controls Governance

• Risk and controls governance is an operational strategy that helps organizations align IT activities with business goals, manage risk effectively, and comply with government and industry regulations.
• Governance, risk, and compliance (GRC) today requires boards to have centralized oversight of the most pressing organizational challenges.

Streaming Media Company

• This topic is about a streaming media company.

Agenda

• The agenda covers topics like the importance of GRC, types of controls, integration of risk and controls, top trends in GRC, challenges in GRC, the COSO framework, strong internal control frameworks, and control trends and 2025 ahead.

The Rising Importance of GRC

• GRC (Governance, Risk, and Compliance) is a crucial operational strategy for organizations.
• GRC's goal is to equip organizations with comprehensive risk and regulatory landscape oversight.
• GRC helps organizations align IT activities with business objectives, manage risks, and maintain regulatory compliance.

Risk and Controls

• Risk is any threat or uncertainty associated with an organization's operational activities.
• Outcomes of risks can be either negative or positive, though negative outcomes are of greater concern.
• Controls are procedures put in place to mitigate organizational risks, and they should be clearly defined and measurable.
• Controls aim to identify, prevent, or detect errors related to data, processes, people, and regulatory compliance.

Types of Controls

• Controls include manual controls, IT dependent manual controls, application controls, and IT general controls.

Integration of Risk and Controls

• Effective risk management requires analyzing risks and vulnerabilities to determine their severity and impact.
• Prioritizing risks based on potential damage and taking necessary action is crucial.
• Policies and procedures are critical for ensuring that management directives are followed, risks are addressed, and control procedures are documented and evaluated for effectiveness to ensure regulatory compliance.

Top Trends in GRC

• Continuous monitoring and adaptation are critical for GRC in 2024, as regulatory landscapes evolve and become more complex.
• Robust data privacy and security measures are essential to mitigate evolving cyber threats.
• Evolving regulatory landscapes, proactive adaptations to compliance programs, and cognitive AI and automation will transform risk management and compliance functions.
• Strong internal controls that ensure effective governance and risk management are needed.
• Collaboration and integration among GRC functions is important for strengthening internal controls and resilience.

Challenges in GRC - 2024

• Cybersecurity remains a top priority, demanding increased investment in technologies for enhanced risk management.
• Evolving cyber regulations, such as the Digital Operational Resilience Act (DORA) and the Sounds Practice for Cyber Resilience, increasingly influence GRC strategies.
• Top cyber threats include ransomware, network and application attacks, privacy concerns, and data breaches.

The COSO Framework

• The COSO framework (internal controls framework) encompasses aspects of control environment (culture, ethical values, risk attitude), risk assessment (risk identification, reduction, elimination), information and communication, and monitoring activities.
• Monitoring ensures that employees adhere to internal controls.
• Communication systems ensure internal and external adherence to legal requirements.

Strong Internal Controls Framework

• Robust internal controls are essential to effectively manage risk, enhance risk management practices, and ensure diversification of investment portfolios and customer bases.
• Strong internal controls can ensure better governance, oversight, and prevent unsustainable practices.
• Internal controls incidents in banking, such as the 900millionCitibankblunderand900 million Citibank blunder and 900millionCitibankblunderand250 million JP Morgan Chase fine, highlight the need for effective internal controls.

Case Studies

• Examples of internal control failures leading to financial losses are discussed, such as Citibank and MetLife cases.

Control Trends: Preparing for the Future

• Intensified focus on regulatory compliance, automation and Al revolutionizing internal controls, escalating fraud risks, and ESG reporting and internal controls are key trends.
• Al and automation technologies will be critical for success in 2025.

2025: The Year of Regulatory Shift

• The regulatory shift in 2025 mandates companies disclose internal control failures, assessment details, and a formal declaration on the effectiveness of internal controls.
• This shift focuses on improving accuracy in reporting and assessing effectiveness of internal controls.

2025: The Year of Regulatory Shift (cont'd)

• Regulatory focus on Al and cybersecurity will remain intense.
• Companies will be held to high expectations to enhance risk controls related to cyber security, information protection, Al, and financial crime.
• Regulatory themes in 2025 will focus on regulatory divergence, Al, cybersecurity, fraud, fairness, and operational resilience.

About Capgemini

• Capgemini is a global business and technology transformation partner.
• Capgemini offers digital innovation, design, and transformation services, products, and experiences.
• They have a global team of over 340,000 employees in 50 countries.