In this current environment, Risk Management is still one of the challenging issues in this rapidly evolving world. Each person is having a different perspective on the situation, different probability, different consequent priorities, and also has a different scope of responsibilities. The risk management issues have highlighted a variety of concerns in recent events. This type of events such as data breach as well as multiple search engine rollbacks, have forced the firms to focus on data security, confidentiality, and control across systems.
Currently, for all the ongoing management, there is a need for secure systems. While the regulatory compliance obligations are so complex to manage. Beyond these recent situations, the traditional areas of risk which people face and to invest in technology has been continuously sustained. These traditional areas of risk include records, conflicts, new business intake, finance, employment and IT disaster recovery.
Currently, the risk management has taken efforts to focus on the events that’s creating risks to the firm’s which process data, image, and profitability, and many of these revolve around the IT department. With the successive setting of policies and compliances, the market becomes conservative, when it comes to the risk management, as these activities can cause more risk than they resolve. The study related to the risk management has gathered the insights of general counsels, IT leadership, professional liability insurers, risk directors, and risk vendors. Their input has given a unique viewpoint of risk management issues and trends. The upcoming trends that are actually shaping the risk management are:
Partnership of Risk Leadership and IT Leadership
The risk leadership and IT leadership are increasingly working together. This partnership is reflecting on the firms that depend on the technology and electronic information, as they are creating and mitigating risks as well.
Data Confidentiality
The data confidentiality has already emerged as a leading issue for the legal community. While the improper use of the information in written and spoken format is critical to control, but the electronic form of data proves to be secured, and the IT world is demanding for that. The IT firms are expecting security regardless of ownership, location, etc. In today’s world, the automatic data confidentiality software is expected to accelerate the tackling of compliance and privacy issues.
Practice Risk
Today, there is a need to identify and control the risks. The active discussion on risk is increasing the boundaries of risk mitigation. This emerging practice is being followed to create a risk management team. Recently, investments have been progressively increased for the education market and have made funds available to help firms to improve risk management and compliance.
Outsourcing of IT Risk
The IT firms have made huge investments in IT recovery capabilities, as they understand the effort that is necessary to maintain the systems and data. This is having the potential to notably reduce costs and save staff time.
Client Sophistication with Risk Requirements
The ongoing client relationship formations have created a noticeable method to increase the risk handling capabilities. Based on the current trends, it is expected that the risk requirements can become more specific and sophisticated.
From Implicit to Explicit Risk Mitigation
When it comes to the risk management, the market becomes conservative. And the firms often view the proactive identification of risks. While it is expected that the policies and education are growing in general, specific IT policies and the automation of assessment and compliance (for risks such as data confidentiality and system change management) are the still exceptions.
Centralization of Risk Management Responsibilities
The responsibilities for risks are as fragmented as the risks themselves. These teams include the governance, risk, and compliance (GRC). The governance refers broadly to the rules, processes or laws, by which the organizations are operated, regulated and controlled. An organization’s perception and tolerance for risk rest on the backbone of its governance. Risk management comprises the plans, policies, and procedures, which are designed to control activities in order to accept, avoid or minimize risk. To verify the risk management controls are being followed or not, compliance must be monitored and measured.
Internal Assessments
The ability to create a sustainable education and compliance environment of professional risk management is one of the element aspects. While the periodic external audits are appropriate, an internal assessment capability ensures day-to-day analysis of progress and improvements. Some of the larger organizations have hired well experienced risk leaders at the top positions to facilitate this process, although these roles still have limited preview to reach across the firm to identify risks. The multi-disciplinary well experienced risk teams expect the internal assessment process to be high on the agenda.
From Loss Prevention to Competitive Advantage
Minimizing the losses from malpractice claims is the key focus of risk management. The newly developed risk management standards offer a more positive perspective, which notes that risk management is not only the mitigation of loss, but also the improvement of efficiency in the operations, environmental protection, financial performance, corporate governance, human health and safety, product quality, legal and regulatory compliance, public acceptance, and reputation.
By addressing the risks represented by the above topics, the firms can find ways to create the business advantages. It is expected that some of these trends will also take years to become the norm. In the short-term, the proactive participation of IT in understanding and addressing risks, ensure that the consequences for risk events does not fall proportionally on IT’s shoulders
