It’s a natural reaction, when something goes wrong, to try and fix it and prevent reoccurrence. In the context of operational processes, and the high regulatory and risk environment in which we operate in financial services, it’s no surprise.  What is not always considered though is how the preventative measures by way of a process control can influence the effectiveness of a process.

A process consists of several actions and decisions to reach the desired outcome and objective. Depending on the complexity and risk associated with the process, the actions will be supplemented by controls to mitigate the risk of an error.  When an error occurs, the knee jerk reaction often is to add another control at the point of failure.

On the surface this seems completely reasonable but overtime the effects of this can cause inefficiencies in the process.  When engaged with clients to help with process optimisation we repeatedly see excessive checking, handoffs and bottlenecks, controls occurring too late or even too early, to name just a few.

An overarching control framework is essential for any business to assess the control environment, ensuring it is aligned to the risk appetite of the business and acceptable levels of risk embedded at process level.

We recommend a regular review of the control environment and the controls at process level to determine if the controls in place are designed adequately to mitigate the underlying risk presented.

As part of this framework and implementing new controls, it is so important to take a holistic approach and look at the process in its entirety to assess the impact that control will have on the process efficiency and ultimately the outcome for the customer.  Just because a failure occurred at a certain point does not mean that is where the control should occur.

As we move forwards to accommodate the new consumer duty, firms are expected to have an increased oversight of their key processes and services ensuring that customers receive good service and ensuring that key risks are controlled accordingly ensuring good customer outcomes.

At Simplify we have a proven process optimisation framework as part of Simplify DNA and experience in implementing Risk frameworks.  Get in touch today if we can help you in this area.

Jayne Brown

Lead Consultant