For wholesale risk professionals, business risks appear in various guises. Two processes that can help mitigate these risks are penetration testing and vehicle inventory auditing. While seemingly disparate, these assessments share surprising parallels that are useful in risk management strategy.
Identifying Security Weaknesses
Penetration testing involves simulating an attack on a computer system or network to identify vulnerabilities and weaknesses that could be exploited by cyber attackers. The goal is to identify these weaknesses and provide recommendations for action to improve overall security. Penetration testing can help to:
- Test business-as-usual assumptions
- Identify potential security vulnerabilities and weaknesses in the organisation’s IT infrastructure
- Determine the impact of these vulnerabilities on the organisation’s operations
- Develop a plan for addressing these vulnerabilities before they can be exploited by attackers
Controlling Funded Asset Risk
Vehicle inventory auditing verifies and reconciles the physical inventory of vehicles owned by a company or organisation. The goal is to ensure the actual inventory matches the records and to identify any discrepancies. Vehicle inventory auditing is essential to:
- Validating funded inventory
- Verifying the accuracy and completeness of inventory records and dealer stock management practices
- Discovering vehicles sold out of trust
- Identifying issues more rapidly, resulting in improved risk management and greater control over the funder’s risk exposure
- Determining which dealer groups provide the most significant opportunities for growth for financing solutions
The Benefits of Automation
While traditional vehicle inventory auditing methods involve manual processes, advancements in technology have resulted in the emergence of digital inventory auditing tools, which bring multiple benefits. Standardisation and automation result in consistency and precision. Digital inventory auditing also allows for dealer-self auditing and involves the use of sophisticated software to automate the process of verifying and reconciling the physical vehicle stock, resulting in greater speed, efficiency, and accuracy.
Digital dealer self-auditing tools provide real-time tracking and reporting, allowing floorplan funders to monitor inventory status and make informed decisions based on up-to-date information.
By leveraging the benefits of digital inventory auditing, funders can gain greater visibility and control over their floorplan funding, improving risk management and overall performance.
Parallel Mindsets: Proactivity in Business Risk Management
Although seemingly unrelated, penetration testing and vehicle inventory auditing share surprising parallels in terms of mindset, managing business risks, and being proactive in making changes to processes.
During a pen test or audit, many assumptions are challenged, and gaps are exposed. By leveraging insights gained through these assessments, CROs can develop a comprehensive risk management strategy that addresses both digital and physical assets.