Much like the Butterfly Effect from the chaos theory, a business too is susceptible to an organisation-wide impact arising from a single negative occurrence. These days, industries economies, and businesses are so interconnected that even a single risk-related event can cause widespread disruption beyond the local boundaries and across this chain.
With Governance, Risk Management and Compliance (GRC) becoming a mainstay, it is no longer just about compliance or assurance. It is now about driving business growth and contributing to the revenue generation of the business in the long run. The European Union’s General Data Protection Regulation (GDPR – for those businesses operating in the region), recent cybersecurity breaches and the rise of AI will hold sway in GRC. In this article, we take a look at the top GRC trends of this year.
Increased Adoption of AI & Automation
Think big data, cloud, AI, etc. AI holds tremendous potential to automate day-to-day risk related tasks, and thereby rationalize costs whereas blockchain technology can help businesses manage and share GRC data quickly. Big data can revolutionise the way businesses consume and utilise data while the cloud, in turn, is enabling the seamless flow of data and information across locations. However, businesses will have to be cautious about the variety and volume generated by these new technologies. Processing a wealth of information for little risk intelligence data can be a gargantuan task that requires the use of further technology to filter and contextualise information for effective insights.
Gone are the days when companies were more concerned with past events concerning the business. Nowadays, it is more about what is currently happening, what is expected to occur and potential decisions, scenarios, etc if a particular event does occur. They also need to be able to trace back all this information back to the core business performance for which risk analytics will play a key role.
Quantitative Risk Management
The umpteen number of recent reports of cybersecurity breaches have caused businesses and entire industries to turn to risk management experts to analyse and reduce their company’s risk profile. A few years back, qualitative risk management was unable to provide quantifiable analysis but with the adoption of new methodologies by organisations in response to this have helped company CXO’s to take more informed, actionable business decisions to reduce company risk to make strategic planning.
Collaborative GRC With Focus On Company Culture Through Technology
Managing risk in silos can be rather disastrous. There is a shift in the attitude and principles of risk management within companies to that of an integrated, collaborative one where the various elements of GRC are tied together. For a successful shift to integrative risk management, organisations will be required to embark on a phase-wise journey towards integrated GRC with a well-thought-out roadmap, planning and processes that involve the entire organisation. Essentially, GRC needs to be at the heart of corporate culture, right from IT to administration and R&D.
Partnerships Will Be In The Forefront
Not all companies may have the GRC skills and capabilities all within a single department. This is where GRC consulting firms and professionals can help bridge the gaps. There is a growing trend that emphasises on bringing together companies and their capabilities together in a single, comprehensive GRC platform – one that fosters open and transparent communication, and enables people to learn from each other’s best practices and mistakes.
This year, technology-based, data-oriented GRC processes are expected to add value to businesses alike. Compliance, risks and governance challenges are not just uni-dimensional, but also reputational risks, strategic risks, and financial risks. Understanding these interconnections will be crucial to the C-suite in building a strong, successful business.