Comprehensively Managing Risk Using Risk Data as a Service
We are living in the age of the acronym. It seems that every day, a new service is created that’s designed to address business issues—though it’s not always entirely clear how. This is especially true in the “anything as a service” industry. These services are about helping companies craft flexible computing strategies while limiting their expenses by breaking down needs into individual services that can be performed in a cloud environment. Two common “as a service” options that companies choose is Data as a Service (DaaS) and Risk as a Service (RaaS).
Both these services are necessary but are designed for different uses. Data services determine how your data is collected and managed. Risk services are designed to help you minimize computing and even human-based risk. By combining the two, companies can streamline their computing while also managing risk. This is a relatively new area of “as a service” computing known as Risk Data as a Service (RDaaS) that allows companies to do both at once.
What are RaaS and DaaS?
Both Data as a Service and Risk as a Service are ways of turning tasks which were previously completed by people into automated systems. This was only possible recently as computers have grown smarter and more capable of drawing parallels and understanding context.
The best way to explain this is to start with the simpler of the two, DaaS. Data as a Service takes hard computer coded data which isn’t readable by humans and makes it readable. For example, say you have an employee database that tracks employee time. At the end of every pay period, the system spits out a report that gives the employee hours worked and amount due. Data as a Service is what makes that report possible. It takes those coded hours, makes them machine readable, does the math, notes anomalies, and distills the information into a readable report of the collected data.
Risk as a Service, on the other hand, is used to track business processes, primarily financial, and then report those risks when they appear. A good example of this would be debit card providers with automated fraud programs. The company issues a debit card and notes that the user’s home address is in the US. Then, the system notices a sudden influx of transactions occurring in the Philippines. A card being used in an area where the individual doesn’t live is a high-risk indicator of fraud. At this point, the risk service would shut off the card and send an alert to the card holder asking them to confirm or deny the transactions. All of this would happen without the need for human oversight.
While these processes are useful, for the most part, they’re completed separately. DaaS manages large groups of data and organizes them. RaaS looks at transactions on an individual level and acts. However, as much of our risk can be predicted by using data, some are looking toward ways to combine the two. This creates a new type of service called Risk Data as a Service, or RDaaS.
Managing Compliance and Business Risk with RDaaS
Combining DaaS and RaaS allows us to create a system that models risk and responds to it on a mass scale. This is particularly useful in the financial industry, where compliance issues open firms up to increased risk. This is especially true in companies where regulations span global borders and where firms do business with third party vendors. Essentially, RDaaS monitors for multiple key issues using data, including:
- Compliance monitoring – While a RaaS program will warn the user when they’re doing something outside of compliance, like transferring funds over an approved amount, it won’t necessarily warn of the attempts to do this that aren’t successful. This is a major issue, as it’s a clear red flag. Say, for example, someone attempts to transfer $300,000 out of the company’s reserve account. The system might prevent them from doing this, but ideally, you’ll also want the system to warn someone higher up that the attempt was made.
- Geographic tracking – Often, when risky behavior occurs in an organization, it’s not limited to one individual. Instead, it becomes widespread through one segment of an organization. Take the reserve issue from above. If the individual was trying to take out an unapproved transaction but couldn’t, they might approach someone with more authority for them to make the attempt. Tracing these issues with RDaaS allows you to find higher risk areas of an organization that may require further monitoring.
- Individual compliance checkups – Some RDaaS programs offer the option to interview people at an individual level and the best programs allow you to do things like this automatically and remotely. Remote Risk Assessment (RRA) is a biometric technology that allows for this by collecting data obtained during an interview and using it to gauge individual risk levels. This allows you to create a risk heatmap of your organization while also minimizing assessment time.
RDaaS is growing in popularity as a means of tracking risk with data. Various technologies are available for monitoring for employee threats, insider trading risk, compliance, and third-party vendor vetting. Tools like RRA allow companies to combine data and risk assessment to make the overall risk management process easier.
If you’re interested in RRA, Clearspeed can provide a more comprehensive look at the technology. It’s possible to implement our processes in any country, in any language, and to complete interviews in under ten minutes. This can be a valuable part of your overall RDaaS system. For more information, contact us.