Board rooms across the globe are discovering that the risks facing their companies are becoming more interconnected over time. If the global pandemic we are currently recovering from taught us anything, it is how intertwined our economic and social ecosystems truly are.
Board rooms must be equipped with the data to create intelligence to best guide the organisation forward through uncertainty. Our current global place-in-time is ripe with challenges and adverse events silently lurking in the shadows. Risk analytics driven by powerful data and process learning is providing critical information to help company boards understand when to accelerate and when to pivot, to avoid unwelcome consequences.
Risk analytics gives boards the information required to make informed decisions on how to best allocate resources necessary to combat risks that can lead to future problems if otherwise left unattended.
With real-time data, boards can measure how their capital investments are performing and whether alternative strategies need to be explored. Simply throwing money at problems and hoping for results is an exercise in futility. Shareholders demand more from a boardroom and so care and diligence is required.
One example is cybersecurity. With cyberbreaches at all-time highs (even during a pandemic) boards have been quite concerned about the risks cyber events can have on the entire enterprise. Risk analytics allow boards to monitor how IT cybersecurity investments are performing and so reduce the risk of cyber events.
With valuable data, boardrooms have the resources to ensure risk management investments are both cost effective and optimising performances.
Testing the Waters
With Artificial Intelligence being able to sift through massive amounts of data, boards can now use this power to perceive likely future events. Scenario analysis and stress testing can help executives forecast how certain decisions may play out in the future.
No longer is this type of analysis specific to the financial industry. It can be accessed and used by any business. Risk analytics integrates data from multiple sources, creating a centralised engine where AI can run scenarios for boards to see how decision outcomes fit within the business’s risk appetite. This can be a powerful tool, having the ability to “see” into the future and properly prepare for future challenges that may be on the horizon.
As this technology becomes even more powerful, forecasting and modelling tools will only become more advanced in showing boards the range of possibilities that an uncertain future can create. This is knowledge that drives value, and risk analytics can help create it.
Reveal the Webs
Collecting data from across the enterprise can reveal how one risk source may be connected to multiple business units within the organisation. If a problem does emerge, it can disrupt more than one area of the business, and this makes recovery efforts that much more complex.
Risk analytics has the power to cast a light on interconnected risks existing in the company’s ecosystem. Revealing these networks, that attach one business unit to another, allows boards to make quality decisions and respond to vulnerabilities within the organisation. When boards are aware of all areas that can be touched by a risk event, they are better prepared to know when to pivot when bumpy roads are ahead. The current global pandemic is a prime example and so vigilant management is critical.