‘Risk in review’ report outlines the imperative to strengthen risk management techniques around resilience, people, technology, and next-generation risk analytics
NEW YORK, April 8, 2013 – As companies continue to transform their businesses to succeed in today’s fast-changing global environment, they remain concerned about growing external market risks that can derail their strategic priorities, according to the new PwC US Risk in Review report entitled, “Global risk in the transformation age."
These changes in business direction are adding further complexity to the global risk landscape, and well-positioned businesses are taking decisive steps to bolster their risk management techniques to focus around four strategic response categories: resilience, people, technology and next-generation risk analytics, the survey finds.
Based on a survey of more than 800 executives and risk managers in businesses worldwide, PwC’s report notes that more than two-thirds of companies have undergone a major transformation in the past 18 months, and another 10 percent plan to do so over the next 18 to 24 months. To respond to global market shifts, corporations are building new business models, tapping into digital channels and expanding into new geographic markets, all while rethinking how their supply chains and the location of their facilities fit into their globalization strategies.
“Continued recessionary pressures, global financial shocks, increased taxation and excessive government austerity are top-of-mind risks for board members and executives because of the serious impact they can have on businesses,” says Dean Simone, leader of PwC’s US Risk Assurance practice. “Changes in business direction have also exposed companies to new risks, and the interplay of market and business transformation is creating complex risk linkages that can be fragile and difficult to predict. This complexity requires businesses to rethink their approach by taking a holistic, multifunctional view of managing risk.”
The risks ahead for 2013
While some of 2012's global market risks are behind us, survey respondents remain concerned about global economic and political pressures. Organizational change and restructuring, talent shortages and greater technology risks are all key transformation-driven risks identified by PwC for 2013.
“In today’s unpredictable environment, companies need techniques to anticipate unknown risks and structures that are resilient to risks when and where they occur," adds Simone. "Businesses can use horizon scanning and early-warning systems to spot trends, and employ stress testing to identify key vulnerabilities. More flexible risk appetite statements, corporate-wide contingency planning and a risk-aware corporate culture that challenges conventional wisdom are all powerful tools that can help organizations better manage emerging risks.”
Risk in Review outlines four strategic response categories in which forward-looking businesses are bolstering their risk management techniques to address risks arising from market and business transformation:
To download a full copy of the Risk in Review report, please visit: www.pwc.com/us/riskinreview.
In addition, companies can benchmark their risk profile in comparison to their peers and the industry with PwC’s on-line benchmarking tool.
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