Risk Management Trends
As companies deal with the residual consequences of the COVID-19 epidemic, enterprise risk management has taken centre stage. To be competitive in this new environment, executives have concluded that stronger ERM programmes are essential. Risk managers, for their part, are looking beyond the immediate ERM measures needed to combat the pandemic to see how a successful enterprise risk management programme may help their organisations stand out from the competition. Across global markets, businesses are becoming increasingly integrated with partners, distributors, and suppliers. We’ve discovered that when one of those categories has much more risk, it can have a cascading effect on the others.
The risk landscape is changing, and business continuity planning is being influenced by four security and risk management trends.
- Workflows are consolidated using risk maturity frameworks: According to Valente, more businesses are exploring a risk maturity framework as a method to manage the risk landscape’s rising interconnection of vulnerabilities. This strategy is similar to other frameworks used in software development, such as the capability maturity model. Processes and technology must be addressed in order for risk management maturity to be achieved.
- GRC technology stacks are being added to ERM technology stacks: Enterprise risk management now includes security, IT, third-party partnerships, governance risk, and compliance, in addition to financial governance (GRC). To design and manage rules, conduct risk assessments, evaluate risk posture, detect holes in regulatory compliance, manage and respond to incidents, and automate the internal audit process, a comprehensive GRC platform can be a vital integration tier.
- ERM is thought to be a competitive advantage: Since the outbreak of the COVID-19 pandemic, many firms see risk management as a strategy to gain competitive advantage rather than simply avoiding negative scenarios.
- Risk appetite statements are being used more widely: To better communicate with employees, investors, and regulators, the financial industry developed risk appetite statements. To extend a pool of loans, some risk is necessary, but if too many clients default, a bank must have a plan in place to take swift action.