Redefining Risk Management: Survey Highlights Future Demands and Opportunities

Risk management is more than simply mitigating threats. These functions are now pivotal in identifying opportunities and shaping strategic directions. An article by Risk Management Magazine highlights the 2023 KPMG Chief Risk Officer survey, which includes responses from 390 U.S. enterprise risk executives, and explores the readiness of risk functions to meet future demands, the challenges keeping leaders awake at night, and the evolving priorities.

Mounting pressures such as macroeconomic uncertainty, regulatory compliance, and the need for growth or strategic change are accelerating changes in risk management strategies. Challenges include the strain on risk leaders’ abilities to keep pace with change, especially regarding regulatory and compliance risks. Despite 80% of risk leaders feeling equipped to address cybersecurity risks, predictive modeling and automation remain underutilized tools.

Opportunities lie in aligning risk strategy with business objectives and fostering a strong risk and compliance culture. Regulatory compliance stands out as the top challenge, demanding a proactive and agile risk management culture that integrates risk considerations into broader business strategies.

Risk functions also face the task of balancing effectiveness and efficiency. Technology, particularly AI and machine learning, emerges as a key tool for accelerating risk control processes. However, careful consideration is required when outsourcing risk management activities, as it necessitates maintaining adequate risk control and governance.

Moving forward, the strategic scope for risk functions encompasses driving cost efficiencies, ensuring compliance, and delivering business growth. Embracing uncertainty and leveraging technology and talent are essential. Ultimately, organizations that integrate risk management as a strategic component of their value chain will excel. Success hinges on understanding emerging risks, aligning strategies with business objectives, and fostering a culture of risk awareness and adaptability.