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Will Your Pandemic Modifications Last?

July 15, 2020

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Emerging from the COVID-19 Crisis? Now’s the time to critically evaluate your pandemic modifications

It’s no mystery that to accommodate effects from the pandemic, financial institutions have made dynamic and real-time changes to operations and corresponding risk programs. But have they fully assessed those changes to become business as usual?

Looking at those changes critically may save time and money. In this blog, we share points you should consider in order to formalize these changes over the long term.

A Nimble Industry Serves Customers Well

During this crisis, we have seen the industry pivot quickly in order to adapt to a rapidly changing environment.

Lenders instituted new governance processes to fast-track critical decisions in a timely and disciplined manner. Also, companies quickly implemented customer treatments and fulfilled government promises.

Amazingly, our industry migrated an office workforce to a remote environment in a very short period—we know of lenders who flipped their workforces to home within two weeks.

Assess “Pandemic Modifications” for Long-Term Efficiencies

As you begin transitioning back to “normal” business operations, it is important to thoughtfully evaluate the impact of any temporary changes made for the pandemic before hastily reverting to business as usual.

The reality is that some changes made may offer more efficient, effective, or resilient long-term solutions.

Evaluate Deferred Activities & Temporary Changes First

  • Revisit all deferred activities to determine the optimal course of action. Examples of deferred activities include recurring control testing, on-site vendor audits, and risk control analysis and monitoring.
  • Assess the temporary pandemic modifications made to business operations to determine if either unwinding or permanently adopting the changes made would be in your best interest. Examples include remote work, increased economic hardship accommodations and treatments, and accelerated and streamlined risk review and approval processes.

Assessment Activities Should IncludePandemic modifications list

While performing your evaluation and assessment of deferred activities or implemented pandemic modifications, the following actions are critical.

  1. Review your deferred activities and conduct a credible challenge exercise to ascertain if activities should remain deferred, sunset altogether or be moved into a heightened area of focus based on risk evaluations.
  2. Determine if there is an opportunity to permanently adopt newly implemented activities.
  3. Identify and plan for new controls required to accommodate the go-forward state.
  4. Update existing (or create new) process documentation to account for implemented changes.

Finally, with the ever-increasing complexity and interdependency of businesses and technologies, it’s essential to perform these assessments across all businesses and risk event types.

The results should then be aggregated and evaluated by key risk and opportunity themes observed which will allow you to confidently identify, categorize and rank order all cross-business risks and opportunities.

Concerned about your capacity or expertise to perform such an assessment?

Given the competing priorities that your organization is likely facing as we venture into a new normal, Bridgeforce can provide additional support to perform the evaluations suggested above.

With our help you can accelerate the need to address competing priorities.

Over the past 20 years, Bridgeforce has worked with financial institutions of all sizes to evaluate their risk management programs as part of our field-proven assessment methodologies. We have conducted hundreds of risk assessments across the three lines of defense and across the credit life cycles. Let us help you.

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