BY Fraser Tennant
Displacement by technology is among the potential threats to the future of risk management, according to a new report by the Institute of Risk Management (IRM).
In ‘Risk Agenda 2025: Perspectives on the future of risk’, the IRM sets out two future scenarios for risk management. The first, which involves risk managers working closely with their boards, sees a future in which risk controls are fully embedded in the frontline which, in turn, frees risk functions to focus on strategic risk, mitigate emerging threats and optimising opportunities.
The second scenario, a much bleaker vision, has risk management merely as a back office, compliance function, remote from the board and possessing no discernible leadership role, with displacement by technology the ultimate worst-case scenario.
That said, the IRM report is quick to reconcile these potential scenarios by observing that it is largely within the power of risk managers to choose and shape the future of their profession.
“The publication of ‘Perspectives on the Future of Risk’ marks the beginning of IRM’s Risk Agenda 2025 project,” said Clive Thompson, IRM board member and chair of the Risk Agenda 2025 project group. “The purpose of this initiative is to stimulate debate within the risk community by examining how enterprise risk management (ERM) might be delivered in 2025 and by then proposing different ways that the risk management profession might prepare itself for the possible future scenarios.”
Alongside the report, the IRM is conducting a survey to gauge the views of risk management professionals as to the future of the profession and how it is likely to evolve in the future. Mr Thompson continued: “The contribution of IRM members and other stakeholders will be critical for the quality and inclusiveness of the project’s output.”
Working alongside the IRM is the ERM solution provider Sword Active Risk, which is acting as technology partner on the Risk Agenda 2025 project, as well as helping to gather opinions and suggestions that will feed into the conversation on the future direction of our industry and inform the IRM’s thinking and strategy in the years to come.
"Such research provides an important long-run perspective on the issues and opportunities facing the risk landscape," said Keith Ricketts, vice president of marketing at Sword Active Risk. "As a company, we believe in innovation and that the way you attain this is you fund research and you learn the facts. Ultimately the IRM research is creating new knowledge for us all.”