Risk managers recognise the challenges they face that are coming from increased business outsourcing, greater political uncertainty (including but not limited to Brexit) and business volatility.
The challenges of demographic and socio-economic factors, climate change, digitisation and new technology, combined with the increasing complexity of risks, are placing more demands on organisations. This is set to increase by 2025.
IRM’s Setting the Risk Agenda survey considers ways in which global and regional risk issues may impact upon strategic and operational objectives by 2025.
Technology is transforming the risk landscape
Transformation in technology and associated risks are expected to have the greatest impact upon organisations by 2025. Technological risk is expected to become increasingly complex with the growth of new technologies beyond those currently recognised. Particular areas of growth identi ed were big data analytics, AI, robotics and blockchain technology.
Moving towards 2025, technology will permeate the operations of an entire institution. It is expected that the organisational risk function will be better equipped to manage these technological risks and there will be a continued commitment towards the development and resourcing of risk management in the future (survey respondents reported signi cant increases in past ve years).
Living in an era of greater uncertainty
New technological advances and climate change are delivering an era of greater uncertainty and volatility at a time when opportunities are expanding and becoming more globally integrated and complex. Disruption to business models, nancial instability and economic and geopolitical volatility are expected to have the greatest impact upon organisations by 2025, and contain both threat and opportunity.
Large-scale, global natural disasters and a failure of mitigation and adaptation to climate change are likely to become more challenging for organisations moving towards 2025. Organisations need to re ect on their existing risk architecture and its suitability for managing such risks.
These new risk trends are emerging simultaneously and will compel the forward-looking organisation to adopt or adapt new or existing risk systems and processes. Respondents to our survey indicated that, today, risk management is driven by the corporate risk function. By 2025 it is expected that embedded processes and new automation will have engaged the business in managing risk more fully.
Respondents view of how risk management will change
Risk managers are expected to acquire, or retain, operational skills in nance, technology and key operational functions performed within their organisation. This is likely to lead to a greater degree of specialisation of risk managers. It will facilitate increased integration into business units permeating an organisation.
Respondents forecast a growth in the strategic role of the risk manager of 2025. Risk professionals increasingly operate within contemporary governance arrangements that integrate risk and crisis management to better anticipate and manage emerging and operational risks. Towards 2025 it is expected that risk professionals will be knowledgeable in qualitative aspects of human behaviour and will address culture in organisations. Essential skills for risk managers will include: strategic thinking, influencing and confidence.
