Risk Intelligence is the process of identifying, assessing, and mitigating potential risks with the help of data and technology. It differs from traditional risk management as it covers a proactive approach by predicting potential risks and their implications. With the help of risk intelligence, businesses can make smarter and more informed decisions in the face of uncertainty.
Why is Risk Intelligence relevant?
With the emergence of globalisation, organisations around the world have to face innumerable risks originating either locally or globally. From operational failures to cybersecurity risks, organisations face new-age threats that necessitate a holistic risk management approach.
Risk Intelligence while securing 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.
How does it improve Decision Making?
- Comparative Analysis of Risk and Reward
- Informed decisions require a detailed cost-benefit analysis concerning a decision. All these align with the thorough analysis of all possible rewards and risks entailed in the act of decision-making. This enhances the optimal allocation of resources and ensure realisation of the organisation’s long-term goal.
- For instance, a company after studying the trade shifts, market dynamics along with regulatory costs and trade barriers can make a much better Risk-Reward analysis while entering a new market.
- Increases Situational Awareness
- Risk intelligence empowers companies to be aware of the evolving risk landscape of the region. Thus, companies are able to navigate uncertain times while taking into account threats as well as emerging opportunities.
- For instance, the use of geopolitical risk analysis to understand the political stability of the country can help investors reduce risks associated and volatility.
- Helps understand Risk aggravation and interconnectivity
- Risk Intelligence enables one to understand the complex interconnected network of risks and their various implications.
- For example, deterioration in a bilateral relationship between countries could have a spillover effect with the possibility of increased trade barriers, visa restrictions, or economic sanctions.
- Enable Proactive Decision Making
- With the aid of Risk Intelligence and predictive risk analysis, organisations can identify potential threats and monitor their developments in a real-time manner. This equips the management to make better decisions and align their resources to maintain operational continuity.
- For instance, a company keeping track of events happening across regions such as travel delays, critical infrastructure failure, or natural calamities is much better equipped to reduce disruptions in their supply chain operations.
- Better Resource allocation according to Organisational Risk Appetite
- Through the use of the Threat Vulnerability Assessment Framework, organisations can understand the organisation risk appetite. This helps in understanding organisation-specific vulnerability and enables effective utilisation of resources to reduce the vulnerability.
- Enables Multiple Scenario Planning and Stress Testing
- Risk Intelligence helps in understanding ‘What if?’ scenarios and running stress testing to gauge the organisation’s resilience in various scenarios.
- Encourages long-term thinking
- With the help of Risk Intelligence, management leaders are equipped with information from various sources which enables lateral thinking. Thus, leaders can gauge the long-term consequences of their decisions.
In a nutshell, Risk Intelligence provides management leaders with significant insights and enables them to make better-informed decisions. This helps in building organisational resilience, and stakeholder confidence and gives a competitive advantage in the longer run.
Mitkat helps organisations navigate uncertain times by providing comprehensive insights about the evolving risk landscape. We offer various services including Risk consulting and Security Design, Protective Services, and cyber security services which ensure organisations become Risk Intelligent. Our AI-powered operational risk monitoring tool, datasurfr combined with expert insight enables companies to stay abreast of evolving operational risks and emerging developments.