Importance of Risk Management Framework
Developing a sophisticated risk management framework that allows for improved automated decisioning capabilities is of increasing importance in an economy pressured by uncertainties at a national and global level. A recent survey seeks to describe these factors by seeking input from risk management executives.
PricewaterhouseCoopers spoke to more than 1,000 risk management leaders at Fortune 500 companies globally to determine the extent to which these individuals are challenged to improve and expand existing risk management systems. Findings showed that many of these executives find themselves in a better position to evaluate and combat internal corporate risks, with investments in comprehensive risk management software fortifying this ability.
However, these professionals are less prepared to handle what the survey described as “black swan” events – external risks that occur on a global scale and are far more difficult to predict. These events will be the greatest risks businesses face over the next year and a half, according to PwC, and are spurred by new technologies, economic pressure, geopolitical maneuvering and even terrorism.
More than 50 percent of surveyed executives felt underprepared for such external risks, PwC executive Dean Simone said in a press release. Risk management teams are advised to begin accounting for these unforeseen events in their strategic planning while broadening their preparation and response to external risks to a company-wide level.
Such efforts will only be bolstered by dynamic risk management software that can be configured to the specific requirements of the company. With powerful risk assessment tools in place, executives that are confident in their ability to handle internal risks may be able to spread this capability and confidence to the threat of external risks as well.