Overall, what we see is that ERM’s promised holistic and integrated approach to deal with both threats and opportunities may be facilitated (but not totally solved) by digital innovations. The Institute of Risk Management Innovation Special Interest Group gathered together risk professionals from all over the world to discuss the future of risk management and how digital innovations are revolutionising risk management practices and expertise. In total, 15 risk professionals shared their thoughts in the event and more than 200 people participated in the discussion. This event invited us to enquire what opportunities and challenges may be faced by risk management professionals in pairing up or relying on digital technologies as they currently stand.
The Risk-Revolution Forum’s sessions demonstrate that although (big) data availability is not a problem any longer, it is far from being the panacea either. Despite all the data available, it is hard to make sense of it and structure it in an appropriate way to make decisions. We must understand that data analysis is ultimately only a tool, which must be used to solve a problem. The issue though is that most companies still take data and its analysis to be the main goal of its company. However, even well-known Tech companies, such as Google and Facebook, started by trying to solve society problems and then, only after, gathered enough data to create other revenue streams through target marketing and data analytics. Therefore, companies should not be misled by data solutions, which focus on gathering more data. Instead, they should start by asking what problems they are ultimately trying to solve. Data is not the problem, we already have enough data, but it must be cleaned and properly structured and classified to allow proper decision making.
Machines are not able to make decisions. We must realise that as much as any previous tools or instruments created by humans, machines are designed to perform and solve certain tasks. However, they must be constantly monitored and revised. Despite all data available, we will always deal with partial data, which may have biases due to recording parameters and historical conditions. Humans have always been able to fill this gap and add in intuition, cultural awareness and political sensitivity in their approach to deal with complex problems and uncertainty. We believe that will continue to be the case.
Nonetheless, technology has been helpful, and we see many new solutions being developed in multiple areas. Project schedules are now unpacked by AI and ML to demonstrate its most critical path and most likely risks and revise average activity’s time and cost. Satellites enable constant monitoring at distance and provide reassurance that companies are fully disclosing their activities. A whole supply-chain may be sharing data and enabling the evaluation of cascade effects of extreme events and incidents, which ultimately enhance extended enterprise risk management. Solutions are designed, adapted and customised to attend client’s requirements regarding financial investments and portfolio management. Similarly, integrated solutions provide a better view of how climate change effects will be experienced in diverse areas of the globe and in different sectors considering a multitude of factors.
The Risk-Revolution Forum has gone into space and under the earth to bring you the best-in-class digital innovations and their impact on risk management, which will certainly revolutionise your view or how to perform risk management and enhance your risk expertise. Ultimately, we provided you with insights regarding how far we are from seeing science fiction movies materialising in front of our eyes. That enabled us to put our feet on the ground and take down to earth decisions, providing an insightful perspective of what risk management is all about as well as what (current) digital innovations can provide, or not, to us.
Many thanks to all participants! We hope you enjoyed it.
IRM Innovation SIG Team
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