Organizations have been involved in regulatory governance and risk management activities for a long time. They already have programs in place focused on reducing business risks and ensuring regulatory compliance. But the advent of advanced technology has transformed corporate workflows completely. So, understanding the evolution of governance, risk and compliance (GRC) has become critical to business success. Future-facing enterprises are now using cutting-edge technology platforms instead of spreadsheets, emails and hard copies. This ensures that they remain ahead of the curve, flexible and productive. GRC has now evolved from a disjointed and ambiguous concept to a more unified and well-defined approach to business workflow. From expanding specialized departments and supporting distribution channels to enabling well-rounded HR functionalities and augmenting other areas of environmental, social and governance (ESG) performance – technology has become an active enabler of business growth.

Companies must adopt advanced technologies. And quickly. We know this. But what can they do to stay compliant and mitigate risks? How can enterprises harness technology to respond to business challenges? The answer is quite simple. Enterprises can gain a deeper understanding of their risk and compliance solutions and their technological maturity by tracking the origin and development of GRC technology. Since its inception, GRC 1.0 focused primarily on maintaining compliance with the Sarbanes-Oxley (SOX) Act of 2002. But look at the current business landscape: Modern organizations already use GRC 4.0 based on Agile technology and they are now moving towards GRC 5.0 led by cognitive technology.

Fig: Evolution of GRC

How cognitive GRC strategies promote business resilience and agility
Considering the constantly evolving regulatory landscape, organizations need to stay agile and resilient. It is non-negotiable. But what are business agility and resilience? In essence, business agility refers to the ability to adapt and navigate through opportunities while minimizing potential risks and threats. For instance, Agile GRC was developed in response to the demand for flexible GRC technology solutions. It is customizable to meet organizational needs, open to frequent updates and has a user-friendly interface. Most businesses still use this version exclusively. Business resilience, on the other hand, is the capacity to bounce back from a situation, reduce vulnerability and minimize loss. While both factors are critical to business continuity, prioritizing agility may be more advantageous than ensuring resiliency in some circumstances.

The era of Agile GRC or GRC 4.0 is getting displaced by Cognitive GRC or GRC 5.0. Cognitive GRC has been built upon the foundation of Agile GRC:

1. It uses cognitive technologies like machine/deep learning (ML/DL), natural language processing (NLP), predictive analytics, robotic process automation (RPA), neural networks and blockchain to manage risk and compliance processes. This, in turn, ensures better business agility, efficiency and productivity.
2. Cognitive GRC leverages AI and cognitive computing to help organizations enhance their understanding, monitoring and management of cyber risks. The process of comprehending and recognizing risks, identifying compliance gaps and other operational problems can be automated by using the latest version of GRC.
3. It tracks rule changes. This helps enterprises in assessing their risk exposure and responding to regulatory revisions promptly and more effectively.
4. It provides actionable data insights for smarter decision-making. Version 5.0 can quickly analyze massive volumes of data, spot abnormalities, offer insights into trends and patterns and forecast possible risks and compliance concerns by utilizing AI. So, organizations can detect and mitigate risks, proactively.
5. By automating many of the tedious duties involved in this field, like risk management and compliance reporting, GRC technologies allow employees to concentrate on more strategic responsibilities.
6. So, in substance, GRC 5.0 is designed to reduce compliance costs, enhance audit and compliance procedures and help organizations attain a more comprehensive understanding of their cyber risk profile.

From agility to strategic insights: The benefits of implementing cognitive GRC

Cognitive GRC can potentially transform business compliance processes and comes with multiple benefits. It simplifies the complex.

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Cognitive GRC can potentially transform business compliance processes and comes with multiple benefits. It simplifies the complex. Enterprises can understand complex risk environments through GRC 5.0, as it can:

1. Improve risk management – Identifying issues before they become problems is key to establishing an efficient risk management system. And GRC uses AI and predictive analytics to determine data patterns and do just this.
2. Enhance cost savings – This version frees up resources to concentrate on more crucial duties by automating time-consuming and tiresome operations.
3. Increase compliance – The cognitive GRC model offers in-the-moment alerts and insights. It assists organizations in staying compliant with evolving laws and industry standards like SOX and GDPR.
4. Promote transparency – GRC 5.0 offers insights into GRC processes, end-to-end. It enables organizations to assess the effectiveness of their risk management programs and compliance procedures.
5. Facilitate better decision-making – This edition understands the risks that organizations face and experience. Led by technology, it offers data-driven insights and predicts future trends more accurately to enable better decision-making.

In fact, moving forward, cognitive GRC is the most sustainable method for implementing GRC.

Moving forward with GRC 5.0: Empowering enterprises to navigate risks and compliance challenges

Thanks to its sophisticated risk analytics and reporting capabilities, GRC 5.0 can streamline workflows and assist organizations in achieving their goals and objectives. HCLTech is a pioneer in the field of GRC. Our experienced practitioners, through our established GRC Center of Excellence, offer strategic insights and advisory services to address risk and compliance challenges and adopt a unified risk and compliance framework that can be vertically tailored to meet your organizational requirements. Reduce your risk exposure and improve governance while proactively managing compliance on your GRC journey, in liaison with HCLTech.