Technology and risk
Unfortunately, many risks can never be eliminated entirely, and therefore businesses need to be realistic about their appetite for accepting particular risks.
Most organizations are at least looking into artificial intelligence (AI) – the use of “big data” and machine learning – and many expect greater practical uses of it in the future.
The most likely early uses will be in areas such as operations – to yield productivity improvements – but there are many other areas where AI could be applied to complex tasks or huge volumes of data.
Whatever its uses, companies will need to understand the impact on their end-to-end processes and consider whether there are opportunities to further educate their workforce to ensure they get the maximum benefit.
Professional risk functions need to be developed
If an organization is going to keep up with developments on the digital front, it will need to have people with the skills to do so.
Ten years ago, most sizeable organizations would try to anticipate trends and solve issues on their own. Today it is difficult to anticipate just how technology and AI will develop. Companies often scatter their investments across a wide range of initiatives, including tech incubators, to keep up with the latest innovations and to access talent.
Financial Services businesses (as well as others) need to effectively monitor the potential impact of emerging as well as current risks. They can’t just focus on risks that may be high today and disregard others that may be bubbling under the surface.
One big advance in the last 10-20 years has been the development and strengthening of highly professional risk functions. Having such people keep an independent and skeptical eye on things is a great help to managements and boards.