As increasingly more leaders realize risk is no longer a hazard to fear and avoid, but instead a performance-driver and value-creator worth embracing, Deloitte Advisory explores 10 risk trends likely to continue through 2017 in its new “Future of Risk” report.
“Organizations that enhance their brand in the marketplace, disrupt through innovation, and execute with operational excellence are better positioned to identify and capitalise on risks. Everything from cognitive technologies to more advanced governance models offers leaders the opportunity to safeguard their reputations while evolving their corporate strategies,” said Chuck Saia, Deloitte Advisory’s newly appointed chief executive officer with Deloitte & Touche LLP.
“But it takes real commitment, cultural change, and courage to turn a risk-fearing organisation into a risk-leveraging one. We’ve identified 10 trends that have the potential to significantly alter the corporate risk landscape.”
Here are the top 10 risk trends that business leaders should watch out for in 2017:
Advancements in cognitive technologies, artificial intelligence and data analytics are helping organisations use smart machines to detect, predict, manage and prevent risks.
The Internet of Things (IoT) is equipped with a variety of sensors, communications and computing capabilities that serve as risk monitoring and enforcement points for everything from tracking product safety across a supply chain to preventing fraud via context-aware identity access capabilities.
As behavioural science in the workplace gains momentum, companies are harnessing risk insights derived from it to detect risky behaviour and cognitive biases while also strengthening protocols.
See: Top 9 Disruptive Technology Trends Reinventing the HR Software Market for 2017
Because some risk prevention methods can yield unwelcome side effects like slowing innovation, organisations are expanding their approaches to focus on vigilance (detecting patterns that may indicate or even predict risk events) and resilience (the capacity to rapidly contain and reduce the impact of risk events).
The growth in mega-impact events such as cyber attacks, political unrest and climate change — and their growing financial and reputational impacts are driving companies to re-examine insurance and contracts as business hedges.
Innovation often outpaces regulation and in some instances drives the regulatory agenda. Some organisations are taking on high-risk innovations as a strategy, even when they fall outside of the scope of existing regulations and reaping rewards both on the business side, and in helping their respective industry ecosystems to develop regulatory frameworks.
As risks become more measurable and tangible, organisations will be better positioned to determine an accurate upside value for risk and encourage desired level of risk-taking behaviour in a bid to balance risks and rewards.
Sharing-based and crowd-driven initiatives are gaining more acceptance among stakeholders across industry ecosystems that include customers, employees, business partners, vendors, regulators, suppliers and sometimes even competitors, thus leading to new collaborations in risk management.
Executives are employing real-time monitoring, scenario planning, stress testing, war-gaming, and simulations to introduce more agility, adaptability and responsiveness into their organizations’ strategic threat management efforts.
Consumer activism and hyper-connected communication channels have placed a magnifying glass on reputational risks, leading organisations to foster more risk-intelligent strategies and monitoring systems that can allow them to get ahead of the crisis.
Also read: Top 11 Predictions Transforming the World of Work, HRM and People Practices in 2017
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