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How Banks and Credit Unions Can Reduce Risk in an Omni-Channel Delivery Environment



Managing and reducing risk is a constant worry for banks and credit unions. While successful risk management incorporates detection and mitigation, an Omni-channel delivery strategy must also enhance risk protection through technology, workflow management, and predictive and decision analytics.

Omni-channel delivery solutions include the technology infrastructure to enable financial institutions to identify and reduce risk throughout the customer journey. While the rigors of risk management may appear to be at odds with frictionless customer experience and customer centricity, they are critical for the protection of both the institution and its consumers. Consumers demand not only the convenience of Omni-channel access, but also the security that comes from knowing that they are transacting financial business within a protected environment.

There are five categories of risk that financial institutions must manage. They include:

  1. Customer risk—Validating consumer and business identity and attrition factors;
  2. Credit risk—Protecting the institution from loss due to bad debt;
  3. Operational and transactional risk—Ensuring internal controls, operational reliability, and workflow management for transaction processing;
  4. Compliance risk—Operating within a complex and constantly evolving regulatory environment; and
  5. Reputational risk—Protecting the institution against damage to the brand and community standing.

Banks and credit unions can improve risk management through systematic controls designed to strengthen the institution’s governance and compliance with automation of business rules, policies, processes, calculations, disclosures, and solution monitoring. Successful solutions provide an array of best practices to process information, insights, and knowledge for customer identification, authentication, fraud prevention, and due diligence. Omni-channel solutions can also anticipate and mitigate attrition risk through a predictive expert model and proactive campaigns that reduce losses, maintain high customer satisfaction, and protect the institution’s reputation.

Automated solutions can safeguard an institution against credit risk exposure through consistent credit bureau, debt, and financial analysis -- executing institution-specific policies, rules, processes, scorecards, and pricing strategies in a consistent and secure manner. Automated application decisioning increases productivity by allowing staff to focus their time on meeting the complex needs of credit-worthy applicants. Additionally, it increases non-qualified applicant satisfaction by initiating education and referral campaigns to help strengthen financial well-being and build valuable relationships over time.

Operational and transactional risk can be mitigated by improving efficiencies through automation of processes for SLA management, system monitoring for operational reliability, audit logs, and real-time fraud detection and prevention. Effective automation improves operational efficiency, optimizes transactional processing time, and reduces fraud losses. Automating analysis, disclosures, controls, processes, pricing, and decisioning strengthens the institution’s compliance posture.

The potential damage to an institution’s brand and reputation from failure to mitigate risk can be swift and devastating. According to a recent Finacle report, “reputational risk is felt in no uncertain terms as negative publicity, litigation, loss of revenue, clients, partners and key employees, decline in share price, and difficulty in recruiting talent.”

ARGO’s Connects extends customer acquisition, experience, fulfillment, and service capability to consumers, prospects, and customers across customer journey stages in an Omni-channel delivery ecosystem.

For more information, view the “ARGO Connects, Reducing Risk in the Omni-channel Delivery Environment” interview brief.

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