Vigilance and resilience complement prevention
Future of risk series: Trend four
Risk prevention methods can never be foolproof, and increasing investment in preventative approaches often yields only marginal benefit along with unwelcome side effects such as slowing innovation. Organizations are expanding their approaches to focus on vigilance (detecting patterns that may indicate or even predict risk events) and resilience (the capacity to rapidly contain and reduce the impact of risk events) as well. We can expect activities like these to rise in importance: monitoring emerging threats, identifying anomalies in business processes, managing stoppages from third-party vendors, and preparing for risk-related workplace disruptions.
- What forces are driving this trend?
- What are the opportunities?
- What are potential threats and pitfalls?
- Case studies: Where is this trend already in play?
- Meet the authors
What forces are driving this trend?
|Growing recognition of inability to eliminate risks altogether|
|Rapid advancements in data analytics, machine learning, and AI capabilities|
|Greater sharing of information among organizations as a result of the networked economy|
|Rising threat of nation states investing significant resources into disruptive activities|
|Rise in macro risks such as climate change, natural disasters, political unrest, and more|
What are the opportunities?
- Assess and prioritize risks to determine where to invest in vigilance and resilience
- Identify and test cutting-edge, commercially available tools focused on vigilance and resilience
What are potential threats and pitfalls?
- Inability to detect significant threats due to lack of data, tools, or expertise
- Ineffective resilience efforts due to complex interdependent operating structures or lack of agility
Case studies: Where is this trend already in play?
Cytora aims to provide real-time structured data on supply chain, operational, and geographic disruptions across multiple categories of risk, including factory fires and explosions, labor strikes, terrorism incidents, industrial accidents, and natural disasters for supply chain risk and corporate risk management. Alerts received within five minutes of an event breaking online seek to give organizations the opportunity to try to mitigate risks early and keep costs low.1
Verafin focuses on providing solutions in the fraud detection and anti-money laundering space based on AI-enabled algorithms and a more holistic view of banking transactions with diverse data points. Its latest product strives to enable cross-institutional analysis to detect suspicious activity across multiple institutions.2
Zeean, an open source project, taps the crowd to map the flow of materials across the world. Using this database, Zeean then attempts to help organizations analyze the economic impact of isolated events (for example, climatic catastrophes) on global supply chains through powerful visualizations, working to help organizations and governments achieve supply chain resilience in a cost-effective manner.3