Page 18 - Risk Management Bulletin Jan- Mar 2021

RMAI BULLETIN JANUARY TO MARCH 2021

Y How does the firm respond when a customer has
a problem?

But what value-additionmystery
shoppers bring?

Mystery shopping is a valuable tool that is very cost-
effective & easy to deploy among many other
sophisticated risk management & auditing tools to
identify risks of an organisation. While audits are more
formal and informed, mystery shopping is a discrete
activity where no one is aware of this activity, acting
as a surprise audit for the employees.
Y Fake & manipulated Documentationrisks
The research can be used at various points in the
Y Fraud risks
businessdevelopment, such as helping understand the
customer experience following the rollout of new Y Supply Chain Risks
services or regulations, to investigate specific market Y Other Compliance,regulatory and financial risks
issues, customer safety, and security, or on an ongoing
basis to check continual compliance with existing Conducting a regular ongoingmystery shopping can
regulations. help organisations determine the extent to which the
risk-mitigating activities can reduce risks, ranging from
Compliance risks pose threats to a company's financial, testing and monitoring or employee training to work
organisational, or reputational standing resulting from according to the company norms.Disguised shoppers
violations of laws, regulations, codes of conduct, or the identify critical insights for internal auditors,risk
standard practices of the organisation. It does not only managers, supervisors, and other stakeholders.
deal with outside forces but also requires employees
to remain aware and in line with the code of conduct. Howmystery shoppers shouldidentify unknown risks?
Mystery shoppers identify the strategic, operational, The mystery shopping methodology helps to assess
financial, and compliance risks to which the unknown risk issues ranging from steering of customers
organisation is exposed. towards less suitable products ormisrepresentationby
Relationship Managers to, frauds likekickback
The assessment will help the organisation understand arrangements,overcharging of customers, selling
the full range of its risk exposure, the likelihood of the counterfeit products, impersonification, issuing fake/
occurrence of the risk, the reason it may occur, and the manipulated reports, fudging documents etc. Some of
potential severity of its impact. The framework to the cases on how can mystery shopping exercises can
identify risks needs to be comprehensive, dynamic, be made more effective for the identification of risks
and customisable, allowing the organisation to identify are as follows:
and assess the categories of risks, which could be Y The mystery shopper totest 'Know - your -
exposed in the coming time. The mystery shoppers Customer' compliance!
identify various kinds of risks, ranging under the
category of: In organisations, where the employees may ask for
Y Conflict of Interest identification, like banks or hotels, mystery shopping

Y Checking Violation of policies/contractual clauses SOP should include a question or an observation point
about information and documents asked by the
Y Duplicate/couterfiet product risks
employee. This will help the firm assess, how many
Y Harassment risks employees in practice asked for proper identification.
Y Privacy risks Y The mystery shopper totest 'How the employee is

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