Risk is a set of opportunities

How can risk management adapt to Fourth Industrial Revolution?

One big trend is the availability of data. While the amount of available data will increase, there will also be more techniques to apply. Finding relevant data will be a core challenge but it’s also an opportunity. Think about the Internet of Things (IoT). There are opportunities to improve risk analysis and loss prevention. And so, in this sense, the IoT will all be a big game changer.

In addition, the entire question of how we will transfer risks in the future – such as blockchain technology for example – will certainly have an impact on risk management. Finding relevant data and using it to inform the risks narrative clearly and in a way that is suitable for all stakeholders will be a key development.

What frustrates you most about how risk management is perceived by stakeholders?

Because risk management is about risk, it is often viewed as a negative activity. People naturally think it is about loss, so we must remind people that risk is a set of opportunities. There is no opportunity without risk and in that sense risk management is all about managing opportunities.

So, should risk managers ditch the word ‘risk’ from their titles and given new job titles?

I would say no. I agree that ‘risk’ has negative connotation but changing the corporate title will do little if risk managers communicate the same negative messages. The question that we need to find answers to is, if this is the perception of risk management, then what we can do to change that?

Are traditional approaches to risk analysis, such as risk maps, which are based on likelihood and probability, fit for purpose?

The traditional approaches have their place and will continue to be useful in the future, but that doesn’t mean that that profession should stay at this level. We will come to a point where more due diligence techniques are available and will be used.