We are only finishing the first quarter of 2020, but it has already proven to be a year which will end up having a major impact on our lives. Market instability, oil price fluctuations, and the Covid-19 pandemic have disrupted businesses and supply lines across the globe.

As we come to terms with the realities of these times, we are realizing that many of our systems were not strong enough to protect our infrastructure. That is why the savviest managers aren’t just looking at how to best manage their business during the pandemic, but also at the changes they should make to protect future businesses.
Risk managers are at the forefront of the commercial side of the current situation. Risk managers all over the world are reassessing the risk infrastructure of their organization and monitoring the risks posed by the Covid-19 outbreak. It is too early to tell the exact changes that will come about in risk management strategies, but we can already see some trends in the way the market is moving.

The current outbreak showed businesses that giving employees the option to work from home is critical to ensuring business continuity. Share on X

Work from home enablement

There have never been as many people working from home in the world as we have right now and the ramifications of this will be immense. There were always a few sectors of the economy were working from home was the norm, but there were many sectors where it was considered unthinkable. Businesses in the financial sector tried to ensure that every employee worked from the office because the work was considered too critical and confidential to be allowed from home.

The current outbreak showed businesses that giving employees the option to work from home is critical to ensuring business continuity. Businesses which were prepared to work from home have experienced a more seamless transition from office to working in the home, but businesses, where work from home was not allowed, have struggled to configure networks, implement new data storage policies, implement video conferencing software, train employees, and modify HR systems to manage attendance and payroll.

Risk management from home

Many businesses realized that their risk management infrastructure was too outdated to support working from home. This is a vulnerability that risk managers will attempt to fix as quickly as they can. We expect to see a rise in the adoption of risk management platforms that can be used over the cloud. Businesses will prefer solutions that allow employees to upload files to a cloud server so the business can continue its operations even if the employees cannot reach the office. We may also see more businesses adopt work from home policies if they prove to be mutually beneficial for the employees and the business.

Risk automation

Businesses that already had work from home policies in place aren’t the only ones who suddenly have an unexpected competitive advantage due to the pandemic – those that implemented automation and collaboration solutions are primed for less disruption. This has always been the advantage of automation; it can keep a constant vigil over your business under the most strenuous of circumstances.

The lack of automation and work from home policies has left some businesses in a very vulnerable position. There are cities that are in lockdown right now and there are businesses in these cities which are struggling with assessing risks because their risk managers may not have access to documents and files located in the office. On the other hand, businesses in which automated risk monitoring can keep a close watch on market movements and protect their businesses accordingly.

Global Risk Measures

We can also expect to see increased ‘globalization’ of risk management. This pandemic has been a great reminder of how interconnected the world is now. Risk managers have realized that they do not just have to look at the risks directly affecting their country; there needs to be a way to assess global risks. Many businesses completely ignored the risk of the outbreak because it hadn’t reached their country yet. They now realize that they should have started preparing a long time ago.

We can also foresee global risk registers – risk metrics that assess global risks – will gain importance. The current outbreak is a black swan; no one expected it but we can expect people to worry about something similar happening again soon. We will thus see a heightened awareness of global risks. Even small virus outbreaks, which are quite common, may end up affecting global markets.

Risk management is not a static domain; it is a dynamic field that reacts to the market. The current market movements will end up reshaping risk management. We can expect more automation, increased collaboration, and innovative risk prediction solutions to become mainstream. You don’t have to wait to see why these solutions are a good idea – Get in touch with our risk experts to see a demo of Predict360 Risk Management solution and what it can do for your organization.