The present invention relates generally to risk management and, particularly to a method and system for collaboratively managing risk.
Organizations are increasingly interested in robust systems for assessing and managing risk in general and operational risk in particular. The growing interest in operational risk management has been driven by a variety of factors, including the introduction of regulations requiring businesses to quantify and manage operational risk. In most cases, risk is evaluated based on a risk model that quantifies risk based on a performance metric. Such risk models are of limited use because they do not provide an insight into the underlying risks that affect the performance metric. These risk models are also more beneficial to risk managers, executives, and auditors than to the people who make day-to-day operational decisions within an organization.
Current risk models are static and incapable of mapping an organization's risk to enterprise objectives and business processes. This disconnect between risk models and business processes leads to suboptimal risk mitigation techniques. Further, current risk models do not have continual risk monitoring capabilities and merely report risk based upon historical data, rather than predicting risk based upon the most current data.
Thus, there is a need in the art for a method and system that collaboratively manages risk, and that is also capable of predicting risk, as well as mapping risk to enterprise objectives and business processes.