In today’s fast-paced business environment, technological innovation is full of potential benefits, but it is also full of risks. As more companies feel pressured to innovate, the risk assessment of disruptive technologies can sometimes stay in the middle of the road. Risk professionals who recognize rewards along with risks will help their businesses successfully adopt new technologies.
Traditionally, risk managers have been seen as isolated within their organizations. Today, this can mean that so-called innovators or disruptors in a company can avoid looking for the risk team for guidance. They fear that doing so may lead to a speech about why a new idea, process, or technology is an obstacle and should not aspire to that. Fortunately, risk professionals are increasingly aware of that scenario.
In a recent survey by Marsh, an overwhelming majority of risk professionals agreed that understanding technological innovation is essential to stay at the forefront of their industry.
At the same time, however, two thirds of these same professionals said that their company has either not established plans and procedures to assess new risks, or were unsure whether such processes are in place.
This is in line with the results of a recent survey conducted by Marsh and RIMS, in which more than half of the respondents said that their company had not conducted risk assessments around disruptive technologies.
“Given the impact that disruptive technology can have on an organization’s strategy, that lack of attention to risks must be considered unacceptable,” the report says.
A thorough assessment of the risks arising from the use of technological innovations within an organisation can improve the understanding of a company’s changing risk profile. For example, in Lyft, our team of risk works closely with the legal, finance, compliance, government relations, and others to fully understand the risk of the technology from all angles. In general, challenges may relate to reporting structures, conflicting priorities and bandwidth, making inter-functional collaboration critical.
In recent years, a major focus on data breach and privacy due to cyber risks can sometimes steal the spotlight from evaluating other major risks.
Data breach, privacy and other cyber risks certainly should not be taken lightly, but there is a wider range of disruptive technology-related risks that need to be taken into account as companies adopt new innovations. Modern risk professionals need to look for solutions and alternatives that allow innovation while balancing risk. And to do that, they need to help their company break down organizational silos and intensify discussions.
In a time in which it takes advantage of the disruption or is affected by it, professionals of the risk must assert a leadership role in the understanding, assessment and management of the risks and rewards of technological innovation.