Effective risk management can solve all kinds of business problems, but first it needs to identify them. Managers and staff tasked with mitigating risk (whatever their actual job title) should always be on the lookout for areas of potential improvement. Then, once an opportunity emerges, they must build communication channels that span functional divisions so that affected teams throughout the organization understand the opportunity and prioritize its pursuit.

Only when creative teams work together in this way will innovation truly move operational risk management forward. This is the lesson exemplified by the latest Alexander Hamilton Award winners in the category Operational Risk Management.

• Bronze Award:  Payroll processing outsourcer Paychex was dedicating staff resources to tedious manual processes that opened the company to the risk of errors. The operating risk group collaborated with corporate IT to leverage an internally built robotic process automation (RPA) tool. This initiative minimized the chance of errors, saved thousands of hours of staff time annually, and significantly boosted revenue.
• Silver Award:  For business reasons, Bristol Myers Squibb decided to close its pension plan and transfer the remaining risk to an insurer. But treasury wanted to ensure that market movement during the regulatory approval process would not undermine the deal's value. They began preparing well in advance, waited for optimal external conditions to initiate a risk-transfer transaction, then built a custom hedge portfolio to mitigate market risk.
• Gold Award:  Microsoft's automated treasury and finance processes were highly efficient, but their reliance on a single SWIFT connection created a potential point of failure in the event of a system crash or other workflow disruption. To build business continuity into automated communications with external banks, Microsoft launched a project that securely increased the number of connectivity paths between its systems and SWIFT.

Each of these impressive initiatives reflects the results of treasury and risk groups proactively looking for improvement opportunities. "Enabling the risk group to plug into all different facets of the company creates a chance to identify additional areas of opportunity," says Ken Bersani, operating risk manager for Paychex.