- Repletes’s 2021 Global Risk Management Study reveals a more complex, volatile, and fast-paced risk landscape.
- As they deal with increased complexity and volatility, risk leaders are keen to implement new technology and leverage data effectively.
- Risk leaders acknowledge that they face challenges in assessing the risks associated with new technologies such as artificial intelligence and the cloud.
The 2021 Global Risk Management Study is the second edition. This research examines the ways in which risk management professionals and their functions respond to changing risks and how emerging threats can create new opportunities and challenges for forward-thinking businesses.
We surveyed more than 1000 risk professionals in the Banking, Capital Markets and Comms and Media, Energy and Insurance, Life Sciences, and utility sectors for this year’s global survey.
Yet more complexity
Complex. Volatile Rapid-paced. These were the words we used when describing the risk landscape two years ago in this report. These descriptions are even more relevant today than they were back then.
Recent volatility has increased and reshaped many of the risks businesses are facing, including supply-chain disruptions, cyberattacks impacts, market instability, and challenges to virtual working. What are the new risks that the gradual return of the office will bring? What will climate change bring about new extreme weather events? Will consumers’ behavior and expectations change, as they did during the peak of COVID-19?
It is no surprise that 77% of risk managers believe new, complex, and interconnected risks are emerging faster than ever. Unexpected threats are becoming more frequent for today’s risk function.
Highly skilled and technology-equipped risk teams enable their businesses to detect and navigate potential threats faster and more effectively.
Fast follower technology adoption is not an option
Respondents to a survey of risk leaders say that they are happy with recent steps taken to better use technology. 79% said they are satisfied with the progress made in the past two years when it comes to implementing smart technologies to improve risk management decision-making.
The study data shows that risk teams are behind the rest of the business when it comes to technology adoption. While there has been some progress, many risk teams still fall behind the wider business in technology adoption.
Slow adoption of technology was once excused for lackluster budgets, siloed information, and other investment priorities. But this is no longer true. Risk leaders recognize the importance of technology and have made it a top priority.
Risk to overcome digital-transformation roadblocks
Despite the growing necessity for risk teams to participate in major digital transformation projects, the study data indicates that less than a third are “very satisfied” with their progress in doing so over the past two years.
The study data also shows that only 42% of risk teams believe they can fully assess the risks associated with adopting more advanced technology. Only 45% of respondents believe that their teams are capable of assessing the risks associated with cloud adoption. They are less likely to be able to assess the risks associated with their company’s adoption of robotic process automation, artificial intelligence, and blockchain.
Reposition risk to safeguard growth
Businesses can have more confidence in their growth plans and transformation plans if they have a clear and independent view of the risk function. They are also able to execute them at a faster pace.
Eight out of ten risk leaders believe their teams spend more time on value-adding activities than they did two years ago. However, this same percentage struggles to balance traditional duties with these activities.
Risk can’t be involved in every growth initiative. Instead, it should focus on the most important to the company’s viability. Risk must ensure that it has the skills and time to devote to these projects.