Firms face greater risk management issues: PwC

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The increased risks faced by businesses around the globe are changing the way companies adapt to market shifts, and subsequently creating so-called capability gaps among different companies, according to a recently released report from PricewaterhouseCoopers LLP.

The 2014 “Risk in Review: Re-evaluating How Your Company Addresses Risk” report finds firms creating a risk-aware culture by developing processes to find and monitor risks and conducting more nonfinancial audits.

The majority, or 75% of executives, say that their businesses are facing increased risks. External factors respondents believe will have the most impact on their organization over the next year and a half include technological change and information technology risks, 58%, increasing regulatory complexity and scrutiny, 56%, and changing customer needs and behavior, 50%.

Areas with the largest capability gaps were identified by respondents as fragmented risk data and analysis, 26%, risks from business transformation, 24%, and cyber risks, 23%. Other segments included merging risks, operational risks and third-party risks.

2 Responses

  1. James McCallum Says:

    risk factors seem to multiply quickly as the interconnectedness and complexity of the global economy accelerates… macro risk factors like politics, economics, culture and environmental challenges coalesce in dynamic ways to make risk management and governance a difficult exercise…

  2. Nir Kossovsky Says:

    Agree in part, James. The complexity of risk is increasing, and the interconnectedness facilitated by the internet and social media accelerates stakeholder reactions which compound any underlying problem. The take-away is that prevention is now worth much more than a cure ever was; and that a strategic enterprise-level risk management framework is an essential business tool.

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