Webcast: Risk Management in the Innovation Age
Although companies are uncertain about the potential impacts of disruptive technologies, risk professionals have a role to play in managing their risks and opportunities, according to panelists on Marsh’s The New Reality of Risk® webcast.
Technology risks are among the top concerns of senior leaders, yet only 14% of risk professionals and C-suite executives responding to Marsh’s Excellence in Risk Management XV survey said they “strongly agree” that their organizations have clear processes in place for addressing disruptive technology risks.
One reason why risk professionals are uneasy about disruptive technology risk is the sheer pace of change occurring within organizations. The convergence of mobile, social, cloud-based, and data-driven technologies, for example, is making decision-making and risk management more challenging than ever, said Leslie Chacko, director of the Global Risk Center at Marsh & McLennan Companies. And the full potential of these technologies — and their potential knock-on effects — is not yet fully understood.
Moreover, disruption generally means unpredictability, said Cath Whitaker, global digital transformation lead at Marsh. That naturally leaves many businesses worried that their risk mitigation strategies may not be enough.
Although disruptive technology can be broadly defined, risk professionals and C-suite executives are largely focusing on three specific technologies:
- Artificial intelligence can help users, including risk professionals, find solutions to problems that are complex or for which information is incomplete or details are subtle. But it raises concerns related to safety, security, and accountability and fairness. And it will require human workers to adapt, Chacko said.
- Blockchain offers several potential benefits, including improved security and document management capabilities. But its association with Bitcoin has left many organizations skeptical, Whitaker said, and risk professionals must still take steps to understand the technology and its implications.
- Thanks to the Internet of Things (IoT), once-siloed systems and devices are now connected. This can expose organizations to evolving liability, business interruption, extortion, privacy, and regulatory risks that have yet to be fully considered, said Tom Reagan, leader of Marsh’s Cyber Practice.
Many of these technologies promise greater access to data to aid in risk management decision-making. But a challenge for risk professionals is knowing what data they need to collect and how to use it, said Barry Dillard, director, claims management, at Walt Disney World Resort.
To keep pace with innovation and manage disruption, risk executives must look at both the opportunities and implications of emerging technologies, Chacko said. By boosting their awareness of how technology is changing their organizations, customers, and industries, risk professionals can better enable innovation rather than stifling it.