“Risk intelligence is not about eliminating risk, but about understanding it well enough to take calculated and informed actions.”
Harvard Business Review
In a complex and interconnected world, risk intelligence helps organisations to navigate through uncertainties and disruptive events. Risk Intelligence entails a broader concept that encompasses identification and monitoring; analysing and assessing; and managing the risks holistically. Risks can be in various domains including financial, operational, and regulatory, geopolitical instability, cyberthreats, espionage, or natural calamities.
Why is Risk Intelligence essential?
Risk Intelligence help companies build and increase business resilience by safeguarding their people, resources and operations. Risk Intelligence uses a proactive approach to help organisations reduce the impact of disruptive events and maximise their opportunities in the future.
- Improves Decision-Making
- A better understanding of potential risks and their impact ensures a multi-faceted and coordinated response.
- Better monitoring and analysis of potential risks through data analytics and AI ensures informed decisions.
- Builds Business Resilience
- Decisions based on calculated risks enable businesses to survive and thrive in uncertainties
- Ensures business continuity by securing people, infrastructure, and operations.
- Ensures Proactive Response to emerging risks
- Flexible and agile frameworks along with contingency plans help organisations navigate through dynamic landscapes including geopolitical shifts, regulatory change or technological advancement
Risk Intelligence while safeguarding organisations from uncertainties and disruptions also empowers organisations to identify new opportunities. Organisations can accelerate their growth by tapping into new markets, benefit from shifts in trade corridors, and optimize their operational capacity through supply chain management and talent management. For instance, recently a technological giant, Samsung invested USD 1.8 billion for a manufacturing plant increasing its total investment to USD 8.3 billion in Vietnam. Such a shift demonstrates a proactive approach by the management team after taking into consideration various trade agreements, strategic location, competitive labour costs, and geopolitical tensions.
Components of Effective Risk Intelligence
- Risk Identification: Monitoring and collection of information that may pose potential risk or threat.
- Risk Assessment: Analysing the likelihood of risk and its potential impact of it on business.
- Informed Decision Making: Prioritising risks according to their potential impact and formulating risk-mitigating strategies and contingency plans.
- Risk Monitoring: Evaluating risk-mitigating strategies and monitoring new developments.
- Decision-Making Support: Communicating information related to risks and risk mitigation strategies used with all stakeholders.
Role of Technology in Enhancing Risk Intelligence
Technology enables organisations to collect and analyse data, identify threats, and predict future trends and potential risks. AI and automation tools such as datasurfr aid in data aggregation, and analysis and enable real-time monitoring. With the help of technology, organisations can identify and predict trends along with monitor new developments which significantly improves overall risk management.
Challenges in Implementing Risk Intelligence
- Over-reliance on Technology and automation tools without sufficient qualitative data and expertise
Integrating quantitative and qualitative data with regional experts to provide for holistic risk management
- Evolving nature of threats, risks and trends in cyberthreats, geopolitics and market dynamics
Real-time monitoring and surveillance to gauge evolving threats and trends through technological tools
- Inadequate communication with various stakeholders and isolated functioning resulting in parochial risk management.
Enhance communication and promote co-ordination among various stakeholders to ensure holistic risk management.
Steps to Build a Robust Risk Intelligence Framework
- Defining organisational needs and objectives to identify potential risks relevant to your organisation with respect to region, industry, and market.
- Engaging key stakeholders within the organisations along with external experts to ensure a coordinated response.
- Using the right technological tools such as AI and automative tools for data collection and analysis tailored to specific needs.
- Standardising risk parameters and establishing protocols such as Standard Operating Procedures for potential risks.
- Monitoring and evaluation of risk-mitigating strategies put in force for identifying gaps and opportunities to further strengthen risk management.
- Ensuring a user-friendly interface and adequate training for employees and other stakeholders.
- Promoting a risk-aware culture within the organisation
Risk Intelligence empowers organisations not just to avoid potential threats and risks while protecting their business but to seek new avenues for adding value. Proactive utilisation of Risk Intelligence leads organisations to drive through uncertainty to strengthen business resilience.