Estimated reading time: 5 minutes
No organization wants to deal with obstacles or questions when it comes to their business, customers, or vendors. Tough situations in the business world means money, time, and resources spent trying to solve the issue rather than on bringing in revenue. Take identity theft: the FTC reported there were 4.8 million identity theft and fraud reports in 2020 alone.
That being said, every business inherently deals with obstacles at one point or another. Rather than try to eliminate all issues, the goal is to bring in the most revenue possible while also working to avoid risky opportunities that could lead to loss or regulatory noncompliance issues.
For industries that provide financial services, perform high-level or sensitive transactions, or deal with vendors and other third-parties on a regular basis, it’s particularly important to make an investment into lowering your level of risk so you don’t lose money, harm important business relationships, or get into legal trouble.
As an organization, you’ll always deal with a certain level of risk in any relationship. However, you can lower your level of risk and mitigate negative impacts by performing risk mitigation. Here’s what risk mitigation policies look like and how you can implement them in your own business with the help of a public and private records database.
What is risk mitigation?
Risk mitigation is the process of researching and implementing policies that lower the level of risk in business relationships and transactions. The goal of risk mitigation is to reduce incidents that negatively impact revenue or compliance without turning away high-quality opportunities.
Risk mitigation policies can include identification verification solutions, a customer information program program, customer due diligence policy, compliance screening software, vendor assessment, and ongoing monitoring. Risk mitigation requires comprehensive research in order to perform risk assessment, locate potential threats, and then implement procedures that prevent them from occurring. While there are factors outside of every business’s control that could impact your business negatively, risk mitigation reduces the level of risk in areas in which you do have control.
Who can benefit from risk mitigation?
Running a business is inherently risky, meaning nearly every industry can benefit from risk mitigation policies at some level. Because risk mitigation protects your business from incidents that impact revenue and reputation, any business that wants to prevent loss, maintain a strong reputation, and facilitate high-quality business relationships can benefit from risk mitigation.
Risk mitigation is particularly important for businesses that work with many different parties, provide services that could expose them to fraud, or need to maintain compliance with regulations, such as government, corporations, law enforcement, financial services, and insurance.
What does risk mitigation solve?
Just as the name implies, risk mitigation helps decrease the amount of risk in any given company. If you want to avoid spending a lot of money or time trying to deal with issues in your company, it’s probably a good idea to invest in risk mitigation.
Risk mitigation helps ensure smooth functioning operations while also boosting growth and reducing loss. Risk mitigation policies, like identity verification and identity management tools, help you prevent fraud and maintain regulatory compliance by ensuring that everyone you work with is who they claim to be and you’re only transmitting information to people who are supposed to receive it.
Risk management policies also help decrease the severity of the negative impacts of risky incidences when they do occur. For example, if someone does act in a corrupt way during the course of your relationship and you had previously performed risk mitigation like risk assessment and identity verification, you’ll reduce your liability and avoid paying out unnecessary fines.
Risk mitigation policies like vendor risk assessment, watchlist screening, and business due diligence strategies also help prevent fraud and other crimes by allowing you to gain a clear picture of the people who interact with your company and locate potential areas of risk, like past instances of fraud or other financial crime. When you can pinpoint areas of risk, you can better avoid these risky relationships, maintain financial crime compliance, and focus your energy on building high-quality, safe relationships that will give you a good return on investment.
When you invest in risk mitigation policies, you’ll build a reputation of being a safe and trustworthy business — in turn creating more opportunities that bring in more revenue.
What do I need to get started with risk mitigation?
Risk mitigation may seem daunting, but it doesn’t have to be difficult. While effective risk mitigation policies require planning and investment, a public and private records database like Tracers makes it easier to get started implementing them in your business.
Tracers offers billions of data points pulled from thousands of sources to help you gather the facts you need to locate potential areas of risk and implement effective risk mitigation strategies.
With Tracers, you can perform identity verification and watchlist screening on new customers, vendors, and third-parties. You can also access business records to authenticate businesses and determine their payment patterns and creditworthiness, as well as search criminal records and gather financial information like bankruptcy records, tax liens, and civil judgments to uncover past instances of financial crime and other threats to your revenue and compliance. You can even automate notifications for when the situations of people you interact with change to perform easier ongoing monitoring and mitigate risk at every stage of your business.
If you’re ready to see how the best public and private records database can help you with risk mitigation, get started with Tracers today.