Dynamic risk handling with the ICS: Why companies need to rethink now

The world is currently characterised by volatility, uncertainty and change. However, one thing is certain: if you don’t manage risks proactively, you will quickly become the one driven. But how can insurance companies, as well as all other industries, identify critical events at an early stage and mitigate them effectively? The answer lies in a dynamic approach to the internal control system (ICS).

Efficiency, transparency and flexibility – these buzzwords have long since ceased to be empty phrases and have become vital principles for every organisation. However, while many companies are still stuck in static tables (yes, we are talking about Excel!), practice shows that only a dynamic, digital ICS can meet the requirements of the modern business world.

From Excel to real time: the paradigm shift

Static spreadsheets have had their day. They are time-consuming, prone to error and offer little leeway for quick adjustments. A dynamic ICS, on the other hand, revolutionises risk management by providing

• real-time information: risks are not only identified after the fact, but are immediately identified and dealt with.
• Clarity of responsibility: each control is assigned to a specific person – this increases traceability and efficiency.
• Flexibility: Changes in processes or personnel can be seamlessly implemented.

The crucial difference between static and dynamic systems lies in the time component. While static systems often only look back once a year, dynamic solutions enable real-time risk detection and continuous data access.

The five key elements for a successful conversion

The migration from static to dynamic systems is not rocket science, but it does require careful customisation in five key areas:

1. Responsibilities: In dynamic systems, there are no anonymous functions – each control is assigned by name. Substitute processes and seamless handover when employees change jobs are essential.
2. Independence: Independent controls are essential for high risks. Dynamic systems enable this through clear assignments and a stronger emphasis on the time dimension.
3. Periodicity: Instead of daily documentation, automated systems enable random checks – without jeopardising process reliability.
4. Control density: Excessively detailed plans are replaced by efficient consolidations so as not to jeopardise adherence to the contract.
5. Audit documentation: Digital solutions provide audit-proof documentation to ensure that business processes run properly and with minimal risk.

Opportunities and limitations of digitalisation

The advantages of a dynamic ICS are clear: reduced manual effort, improved data quality and greater risk transparency. However, there are also challenges:

• Implementation effort: Introduction requires careful planning and resources.
• Dependency on technology: The stability and security of the IT infrastructure are crucial.
• Individual adjustments: Standard solutions do not always cover the specific requirements of each company.

The competitive advantage lies in the dynamics

Companies that dare to take the step towards digitisation and automation of their ICS processes secure a clear competitive advantage. However, success depends on a conscious approach – from careful planning to continuous adjustment.

Practical tip: Use affordable web tools to migrate your control and action plans from static tables to a dynamic system. It’s an investment that pays off – not only in terms of efficiency, but also for the future viability of your company.

Christian Hafner, swissaxis AG

Also read: Digital trust as a competitive advantage