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The (Evolving) Art of Risk Sensing
An article by Thio Tse Gan, Cyber Risk Services Leader, Deloitte Southeast Asia
Risks of the present and future continue to change as the business world evolves with technological advancements and innovations. Risk-sensing capabilities and efforts need to be forward-looking and agile to transform risks arising from economic, market, regulatory and technological evolutions. A crucial component of a company’s risk management process, risk sensing supports risk and impact assessment to address risks across the entire relevant time horizon.
Risk sensing helps companies detect emerging risks to be mitigated before potentially significant damage or costs are incurred. It is also a platform for detecting emerging trends to enhance understanding of risk/reward tradeoffs inherent in value creation to improve resource allocations.
To assess the state of risk sensing in large organisations, Deloitte commissioned a survey, with results clearly indicating that organisations have been developing their risk-sensing capabilities. However, these capabilities vary – as do the risks companies monitor, the people to whom risk-sensing efforts report to, and the risks they view as being most important.
The survey also identified that while 80% of respondents use risk-sensing tools, they are applied least often to strategic risks despite their importance to senior executives.