Organizations should focus on developing stronger digital skills and capacity in their risk function to make more informed decisions about risk in a technology-driven world.
That is the finding of PwC’s 8th Risk In Review study, which explores what differentiates risk functions when it comes to digital transformation. It suggests that while many organizations have already embraced new technology as part of their internal audit, risk and compliance functions they are yet to fully realize the potential benefits of using the insights to inform decisions over investment in digital transformation.
The study identifies what habits 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. These include:
- Go all-in on the organization’s digital plan;
- Upskill and inject new talent to move at the speed of the organization;
- Find the right fit for emerging technologies;
- Enable the organization to act on risks in real time;
- Actively engage decision makers of key digital initiatives;
- Collaborate and align to provide a consolidated view of risks.
“Risk professionals are at a critical juncture,” PwC global risk assurance leader Jim Woods said. “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 realizing this.
“It is vital that risk professionals recognize that by improving their digital fitness they can take an active approach to becoming important partners and leaders in helping their organizations get better benefits from their digital initiatives,” he noted.
Woods emphasizes that organizations with dynamic risk functions enjoy more effective risk management. Consequently, he suggested risk managers develop a plan first and then focus on the steps needed to build up capability over time.
“Risk professionals should take note of the plans followed by digitally fit organizations and be confident that they will start to see rapid rewards if they invest the time and resources required now,” he added.
The Being a smarter risk taker through digital transformation: 2019 Risk In Review Study 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.