Page 34 - Risk Management Bulletin Jan- Mar 2022

RMAI BULLETIN JANUARY - MARCH 2022

EMERGING TRENDS IN RISK

MANAGEMENT-WHAT RISK MANAGEMENT

CONSULTANTS NEED TO ANTICIPATE

he complexity of today's business is a key for e.g. Uber is using technology to disrupt the taxi
T contributor to heightened risk exposure for market, Amazon uses technology effectively to disrupt

organizations. Higher complexity also means
traditional retailers. In the realm of risk management,
technology has dual emerging considerations.
the creation of new risks or mutation of
existing risks leading to businesses not meeting their
One, wherein technology is playing a key role in
objectives. Organizations are increasingly re-defining
transforming firms to move from compliance to
their risk management approach to keep pace with the
performance and adopting more effective and efficient
change in the business environment and adapt to the
risk management practices. Other emerging
surrounding complexities to maintain relevance and
consideration for risk managers, is to look at the rapidly
demonstrate value. Organizations have started to look
changing technology landscape as a source of significant
at risk management, not only through a 'Compliance'
risk to the organization's existing business model and
lens, but also as a driver of value and to ensure survival
long-term survival.
in a competitive business environment.
The two key things, among others, successful #2: Convergence of risk oversight with
companies do are managing risks proactively and
strategic planning
adapting themselves quickly to the changing market
Organizations appear to be struggling to integrate their
conditions. The payoffs of managing risks are bountiful
risk oversight with their strategy development and
and companies are focused on risk management
execution. There needs to be explicit focus on the
activities.
interrelationship of risk-taking, strategy development
and execution. Looking at the relationship of risk and
In this article, I am outlining some of the emerging
return, organizations are extensively considering risk
trends in risk management that will have an influence
management inputs for strategic planning. Emerging
on business outcomes across industry segments in the
trends to this regard are, boards embedding risk
coming years.
oversight into the management compensation structure
and Chief Risk Officers (CROs) expected to validate the
#1: Technology, a source of risk and an assumptions underlying strategy and use this to advise
enabler for effective risk management the business on risk taking.
Traditionally, the business models were enabled
#3: Treasury as a strategic business
through the use of technology. Today, innovative
partner
technology drives new business models. Technology is
increasingly becoming the source of business disruption Proactively managing risks have led to changes in the

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