02 April, 2019- Organisations should focus on developing stronger digital skills and capacity in their risk function in order to make more informed decisions about risk in a technology-driven world, according to the eighth edition of PwC’s Risk In Review study.
The 2019 study has found that while many organisations have already embraced new technology as part of their internal audit, risk and compliance functions they are yet to fully realise the potential benefits of using the insights to inform decisions over investment in digital transformation.
PwC’s study focuses on identifying what categories help top-performing ‘digitally fit’ risk functions stand out both in terms of their ability to strategically advise stakeholders on risk and assurance, as well as the risk function’s own ability to adapt and embed new processes required by digital transformation.
The six habits of risk functions that fuel smarter risk-taking are:
PwC surveyed more than 2,000 CEOs, senior executives, board members, and professionals in risk management, compliance and internal audit, and interviewed dozens of executives and board members to explore what differentiates risk functions when it comes to digital transformation.
Bruce Scott, Risk Assurance Leader for PwC in the Caribbean (Onshore), says, "Our experience here in the Caribbean is similar to that of our global counterparts, the risk landscape is constantly evolving and the pace of change is rapid. These changes are pushing risk, audit and compliance professionals to keep pace and ensure that we are digitally fit and ready to use the right technologies to guide us in smart risk taking."
"We believe that there is still more work to be done here in the Caribbean in managing the risks associated with innovation and because of this, PwC has been doing extensive research and working with both public and private sectors to address the gaps. Ultimately our goal is to provide business leaders with the knowledge and resources to manage enterprise-wide risk, to do this we have to ensure that we prepare them for what’s here now and for what's ahead, including innovative technologies", he added.
Jim Woods, Global Risk Assurance Leader at PwC says, "Risk professionals are at a critical juncture. As technology transforms the way we do business - from data analysis to more automation - so too do the potential risks. At the same time, digital transformation is also driving the potential for identifying risk and making smarter decisions yet the study highlights that many risk functions are not fully realising this."
"Only 22% of chief executives who responded to PwC’s 22nd CEO Survey called the risk exposure data they receive comprehensive enough for long-term decision-making - the same figure as ten years ago. This should indicate that risk functions are not harnessing the power of abundant data available.
"It is vital that risk professionals recognise that by improving their digital fitness they can take an active approach to becoming important partners and leaders in helping their organisations get better benefits from their digital initiatives."
The study identifies the key components of an organisation’s ‘digital fitness’ as:
Jim Woods says, "Organisations with dynamic risk functions enjoy more effective risk management, which contributes to greater confidence in taking risks, a faster and safer digital journey, and greater-than-anticipated value from digital investments."
"Any fitness regime can seem overwhelming at first. Yet rather than dive straight in, you should develop a plan first and then focus on the steps you need to build up your capability over time."
"Risk professionals should take note of the plans followed by digitally fit organisations and be confident that they will start to see rapid rewards if they invest the time and resources required now."
Being a smarter risk taker through digital transformation: 2019 Risk In Review Study is available to read here.
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