Risk Monitoring: From Reactive To Proactive

Imagine you’re the captain of a ship, and you spot a massive iceberg on your way ahead. Do you change course or hope for the best? How did you spot the iceberg in the first place?

Gone are the days of manual monitoring, like on the Titanic; icebergs are now spotted with satellite imagery, aerial surveillance, and radar. 

Similarly, modern risk monitoring tools use real-time data analytics, AI-driven predictive models, and automated alerts to identify potential risks before they escalate.

This article talks about the whats and whys of monitoring risks along with its transformation from a reactive to a proactive approach. 

TL;DR Risk monitoring is a proactive and ongoing approach to evaluate a business’s risk management framework.  There are three common kinds of risk monitoring: voluntary, when obligated, and continuous. Continuous monitoring is the most effective of all. Automated tools now allow for real-time risk detection, reducing human error and helping businesses adapt quickly to changing risk environments.

What is risk monitoring?

Risk monitoring involves the surveillance of a business’s entire risk management system and its supporting activities. It impacts stakeholders’ risk-based decision-making and examines the complete security infrastructure to gauge risk exposure. 

Risk monitoring involves tracking and assessing security threats that could impact a business’s daily operations or disrupt its risk strategy. It also involves evaluating whether the measures and controls that manage risks are operating as they should. 

Risk-based monitoring gives you a clear picture of your organization’s risk appetite and the functioning of the risk management framework. It shows you the status of the different types of risks you’re facing and the mitigation strategies involved with them. 

What types of risk monitoring should you be aware of?

Businesses often monitor risks as a response to a threat. Reactive risk monitoring is a response-based approach that involves assessing risks and their consequences after they’ve already happened. 

However, risk-based monitoring must be a key part of your risk management strategy and should be a proactive measure done on a real-time basis. 

Having said that, here are the three most common types of risk monitoring strategies:

1. Voluntary risk monitoring

When organizations monitor risks without legal obligation, but naturally, as a part of their risk management process, it’s voluntary risk monitoring. 

Organizations conduct voluntary monitoring to avoid negative business outcomes as a result of an incident. During this, they might learn from past events to improve future risk management practices. Here, potential risks are identified and mitigated by analyzing historical data and events and some future risk implications that business decisions might bring. 

2. Obligated/mandatory risk monitoring

Obligated or mandatory risk monitoring is the most common type of monitoring practiced by organizations. It’s a regular practice in industries and sectors where compliance with specific laws and standards is mandatory. 

For example, HIPAA is used for healthcare organizations, ISO 27001 for information security, and PCI DSS for financial institutions that collect credit card information. 

Mandatory risk monitoring is enforced by legal regulations to ensure that businesses follow a proper risk management approach to protect customers’ data and avoid legal penalties. 

3. Continuous risk monitoring

Continuous risk monitoring stands to be the best type of risk-based monitoring strategy a business can follow. It is an ongoing process that involves regular tracking and assessment of risks that are relevant to business reality to make sure they are managed effectively over time. 

Continuous monitoring is essential for all kinds of environments because of today’s dynamic threat landscape, where risks can evolve rapidly. Organizations require constant vigilance and adaptation to prevent potential issues.

The absence of continuous monitoring can lead to compliance drifts, increased costs over time, and even reputational damage as a result of a breach. The best way to approach this is through a real-time monitoring tool that has notification and alerting systems to minimize impact. 

Effective risk management tools allow you to take a proactive approach before issues snowball into breaches. Sprinto is one such tool that lets you monitor and manage your risk continuously with precision. This way, you stay ahead of compliance requirements and manage risks effectively through automated alerts, continuous control testing, risk impact scoring, and comprehensive risk reporting. 

Replacing guesswork with precision: Importance of risk monitoring

Risk monitoring allows a company to address potential issues before they occur and free up resources to focus on growth and core business activities. It ensures compliance with industry best practices and safeguards a business from non-compliance penalties and losses. 

On the contrary, traditional or reactive compliance approaches often involve manual documentation, guesswork, one-off risk assessments, siloed management, and reactive issue resolution. These methods are inefficient and keep your business vulnerable, leading to responding to incidents instead of mitigating them. 

Furthermore, having a reactive nature could also lead to potential risks often going unnoticed until it is too late, which could further strain their operations.

The proactive risk reduces downtime to minimize operational disruptions, lowers costs by preventing issues rather than fixing time, and ensures efficient decision-making with the help of real-time risk reports. 

Here’s an example of a risk report:

Risk monitoring example: Uncover (SaaS startup) 

Uncover is a Netherlands-based SaaS startup founded in 2022, that recognized the need for risk-based monitoring early on. Their AI-enabled platform helps lawyers manage and analyze vast amounts of case documents, making data security a top priority. 

The company needed a robust system that could align with various compliance standards while minimizing the manual, reactive work that often bogs down security teams.

Uncover partnered with Sprinto, a GRC automation tool designed to simplify and automate risk management and compliance. The implementation, led by CTO Imre Gelens, focused on setting up a system that could autonomously monitor and manage risks, aligning with ISO 27001 standards.

During the implementation, Sprinto was configured to pull risks and control information directly from Uncover’s AWS infrastructure. This setup allowed Uncover to monitor their security environment dynamically without additional manual effort. 

By tagging entities in AWS, Sprinto could continuously process and update risk data, ensuring that Uncover’s security posture remained strong even as its infrastructure evolved.

What tools or software can you use to monitor risks efficiently?

Risk monitoring can be managed using various tools like integrated risk management software, automated compliance platforms, risk register software, real-time monitoring systems, and automated GRC software. These tools help identify, assess, and mitigate risks by continuously analyzing data and controls, and flagging potential issues. 

Automated software, in particular, offers the advantage of real-time risk detection and reporting. Using such solutions, your business can stay ahead of threats and ensure ongoing resilience with regulatory standards.

Here are three examples of risk-monitoring software: 

1. Sprinto

Sprinto is a GRC (Governance, Risk, and Compliance) automation software that provides comprehensive risk-monitoring features like industry risk benchmarks, a pre-built library of risks, options to score and mitigate custom risks, as well as continuous monitoring. 

The platform has 200+ integrations that connect with your existing tool stack to test your systems against risk-mapped controls and give you real-time status of their performance, along with full visibility of details like their assigned risk owners. 

You can also take a glimpse at the rich risk reports automatically created by the platform to view a collective summary of active risks categorized by risk treatment measures, latest risk assessments, pending tasks, mitigation strategies, and more.

G2 rating: 4.8/5

G2 review by customer:

“Sprinto stands out in the realm of security compliance for cloud companies, offering a versatile platform compatible with any cloud setup. Their innovative solution empowers organizations to monitor entity-level risks and controls seamlessly from a centralized dashboard.” (Feb 2024)

2. OneTrust

The advantage of the OneTrust platform is that it is a multi-role security tool.

OneTrust offers a data discovery and mapping capability that helps large-scale organizations identify and mitigate risks associated with processing and handling data. They have AI-powered data governance, risk scoring, and continuous monitoring specifically to keep a proactive approach to risks that a business may face.

G2 rating: 4.5/5

G2 review by customer:

“OneTrust GRC and Security Assurance cloud helping us automate our compliance and risk management through its highly efficient workflows and advanced features to manage and automate regular audit processes.” (Oct 2023)

3. Resolver

Resolver is suited for enterprise risk monitoring because of its detailed risk profiles and comprehensive scenario modeling. It allows risk managers of large businesses overlooking various departments to simulate potential risk scenarios, assess their impact across different areas, and develop targeted mitigation strategies.

The platform has been deemed to be beginner-friendly and has an easy-to-setup API integration to provide ample customization opportunities in large infrastructures.

G2 rating: 4.4/5

G2 review by customer:

“Very clean UI, our users enjoy using it. Easy to create new applications and build forms and workflow. New dashboards are great and will make a big difference once embedded in the full system. Great support and implementation teams. Responsive to changes and suggestions. Also API integration was easy to set up” (Jan 2024)

Monitoring risks in the age of automation

From a reactive and manual process, the evolution of risk monitoring has moved toward a proactive and continuous system supplemented and powered by advanced technologies such as real-time analysis. 

More recently, automated tools have permitted instantaneous identification of potential threats, assessment of their impact, and smart alerting for swift and effective responses.

The evolution of risk management has reduced the likelihood of human error and ensured that risk management keeps pace with the fast-changing business landscape. 

By adopting automated solutions like Sprinto, businesses can manage their risks with empirical rigor to prioritize better, ensure that risk management practices reflect their reality, and reduce risks proactively with continuous monitoring and smart, contextual alerts.  This allows businesses to focus on innovation while delegating risk management largely to the automated software. See Sprinto in action.

Frequently asked questions

1. What is risk management?

Risk management detects, evaluates, controls, and mitigates threats to an organization’s capital and earnings. It involves implementing strategies to handle potential risks. The goal is to minimize negative impacts and maximize opportunities related to risks an organization faces.

2. What are common types of risk reporting methods?

When managing risks within an organization, effective reporting is essential to ensure informed decision-making and proactive mitigation. The most common types of risk reporting methods include:

• Risk registers
• Heat maps
• Key Risk Indicators (KRIs)
• Dashboards
• Scenario analysis reports

3. What is risk-based monitoring?

Risk-based monitoring is a proactive approach focusing resources on the areas of highest risk in a project or process. It involves continuous assessment and adjustment of monitoring strategies based on identified risks.

4. What are different types of risks?

Organizations face various types of risks that can impact their operations and objectives. Each type of risk requires targeted strategies for identification, assessment, and management to ensure organizational resilience. The common different types of risks include:

• Financial risks
• Operational risks
• Strategic risks
• Compliance risks
• Reputational risks
• Market risks

5. What is third-party risk monitoring?

Third-party risk monitoring continuously evaluates the risks that come from vendors, partners, or service providers your business relies on. It helps ensure that these external parties comply with security standards, protecting your company from potential data breaches, legal issues, or operational disruptions.