Transforming the risk function through big data and analytics capabilities was ranked as risk managers' top priority by far, according to a new report released by Marsh, the Asia Pacific Risk Centre and the Pan-Asia Risk and Insurance Management Association (PARIMA).
Facing a turbulent global landscape of unpredictable economic headwinds, rapidly evolving technologies and socio-political shocks, the digitisation of the risk function will bring some stability to firms seeking to navigate today’s uncertainties.
The Targeting a Technology Dividend in Risk Management report analyses results from MMC and PARIMA’s 2017 Emerging Tech in Risk Management Survey, to provide insights into how businesses plan to deploy technology in corporate risk management. It found that over 60% of respondents prioritise transforming their risk function through big data and analytics technologies, outshining other tech solutions such as robotics and the cloud.
Implementation of technological solutions in risk management is slow
Though the majority of survey respondents plan to deploy risk management technologies in the future, current adoption rates are low. Constrained by investment budgets and a lack of support from senior management, risk managers today have to figure out how to do more with less.
Chairman of PARIMA Franck Baron commented: “Enhancing the credibility and positioning of risk managers in order to expand their footprint and scope of responsibilities is an ongoing challenge. Getting the right support for risk management needs, as well as securing sophisticated risk financing expertise will remain important.”
However, the report urges that these obstacles can and must be overcome to prevent traditional risk functions from falling behind those of their competitors. It outlines a five step process, made up of the following:
- Launch “quick wins” and longer-term efforts based on a digital risk activity map
- Scan the competitive landscape to understand current positioning in comparison to peers
- Define the digital ambition for risk and vision for the future of risk management
- Align regulatory strategy and relationship
- Establish required talent model and implement recruitment strategy
Digitalisation changes the risk manager’s role
The report also looked at how digitalisation will change the risk manager’s role, as a selection of their functions will be automated, while they shift away from manual, number-heavy and compliance-related tasks, and move toward providing higher value strategy-oriented analysis for the C-Suite. Risk managers now need to be innovators, to maintain their key soft skills of communication and to expand their remit to provide more value-added advisory for strategic decisions.
The Emerging Tech in Risk Management Survey 2017 sampled some 130 executives across 17 different industries in the Asia-Pacific region between September and late October 2017. The full report can be found here.