Enterprise risk management has become the spotlight as businesses endure the leftover consequences of the COVID-19 epidemic, the possibility of an economic downturn, and the swift pace of development. To be competitive in this new landscape, executives understand that more robust ERM (Enterprise Risk Management) systems are needed. The interconnection of risks is one component of the current risk environment that businesses must deal with.

In such times, economies throughout the globe have contended with numerous distractions, for instance, supply chain interruptions, record inflation, and the increase in geopolitical stress. Risk management trends 2023 must be kept in mind to manage risk-related concerns. Consecutively, organizations need help to remain afloat during the crisis, and this took a noticeable transformation in how companies perceive the enterprise risk management environment.

Enterprises are becoming more integrated with their partners, suppliers, and vendors throughout international marketplaces. Therefore, the necessity for investing in risk management technologies is becoming more apparent across industrial groups due to rising digitization.

In this blog, you will come across the 6 leading enterprise risk management trends in 2023 that will significantly impact enterprises.

Enterprise Risk Management Trends

1. Risk Management and Digital Transformation Integration

5% of professional executives have reported loads of complications in their company, especially in their operating, data, and technology environment, as per PwC’s Digital Trust Insights 2022 investigation. Organizations are progressively employing integrated GRC (Governance, Risk and Compliance) software-based risk management solutions such as Predict360 to ease risk management activities. In this instance, Technology is essential as an enabler and driver of GRC. This risk management trend in 2023 suggests that it is vital for managers to work with other departments in the company to detect and evaluate the influence to reduce risks as per the risk appetite of an enterprise.

An integrated governance framework can assist by reconciling strategy, staff, procedures, and technological objectives throughout the value chain. Among all discussed Enterprise risk management trend 2023, This is particularly crucial for guaranteeing the risk element is included in more extensive digital transformation strategies.

2. Greater Utilization of Risk Appetite Statements

The rise of Risk appetite statements in the financial sector is for enhanced communication with staff, regulators, and investors. A specific group of risks is needed to broaden the pool of loans, but if loads of borrower’s default, a bank must have a plan to prompt decisive activities. For instance, banks may develop a safety baseline for fraudulent or defaulted mortgage transactions, enabling them to make a profit.

Moreover, this risk management trend in 2023 reflects that organizations encounter numerous challenges in executing a successful risk appetite statement. As it has been believed by some executives that risk appetite statements could bind their capability to pursue emerging opportunities, whereas others are worried that poorly worded statements could be misinterpreted as overlooking unacceptable practices. In this instance, effective risk management software can facilitate the detection of organizational risk as per the risk appetite.

3. Risk Mitigation and Assessment Techniques are Proliferating

The resources available for actively evaluating and managing risks are improving. Internal and external risk monitoring tools that contribute to the creation of risk intelligence which identifies recurring and new threats are among the risk management trends in 2023. Additionally, it has been noted that businesses are utilizing more comprehensive tools that perform the following:

  • Provide a comprehensive picture of risks affecting the entire organization, collect necessary data to show how risk trends, and encourage.
  • Accountability for risk-mitigation measures.
  • Offer managers access to actual time risk reporting to help them make informed decisions.

4. Expanding Restrictions and Concerns about Data Privacy

In today’s environment, data privacy has become a significant risk factor for enterprises. Organizations are interested in monitoring how companies deal with user data due to the increased focus on protecting user data and the continually evolving worldwide data rules. Therefore, this risk management trend 2023 presumes that to maintain compliance, organizations need to understand the pertinent data privacy laws and place efficient ways to manage risk-mitigating tools in terms of erm software. That is how organizations can handle spontaneous distractions.

5. More Attention to Cybersecurity

The cybersecurity paradigm is predicted to change in 2023 because of the significant rise in cyberattacks. Businesses are already advocating for policies like cybersecurity coverage to limit the economic damage caused by these attacks. According to Cybersecurity Ventures statistics from November 2021, the cyber insurance industry is predicted to be worth $14.8 billion by 2025 and surpass $34 billion (about $100 per person in the US) by 2031. Therefore, this risk management trend 2023 suggests an approach that can help financial organizations recognize vulnerabilities and establish controls to find risk actors before any loss is incurred due to cyber-attack.

6. Artificial Intelligence (AI) in GRC

GRC strategies are increasingly adopting AI-based Technology. Automation preserves costs for GRC experts who want to maximize compliance with the proper rules and regulations. Actual evaluation of GRC data and automated reporting has improved GRC systems by boosting operational effectiveness and lowering the costs and risks associated with manual GRC handling. Significance of this risk management trend 2023 can be understood with the fact, as organizations consistently expand their functional scope, data security, compliance, and privacy regulations are unavoidable to reduce risks that could cause financial losses and negatively influence business operations. Therefore, enterprises can employ effective erm software to protect themselves from possible risks and threats.

In a Nutshell

Organizations are consistently improving their risk management strategies to deal with the evolving business landscape and employ surrounding vulnerabilities to pursue relevance. In such times, risk management has already reached beyond compliance, and it currently serves as a strategic component that assures long-term sustainable expansion and creativity and a value generator that shields organizations from risks. To this reason, keeping a close eye on the risk management trend 2023 would be key to stay ahead in the market.

Choosing a thriving and holistic enterprise risk management software is the golden solution to staying abreast in the financial sector. Predict360 ERM is a one-of-a-kind solution to all risk-related challenges. It enables corporate visibility and facilitates enterprise risk management and compliance professionals to evaluate, manage, and decrease risks. It aids risk stakeholders with a comprehensive platform that includes managerial dashboards, automated analytics, and risk monitoring to keep a rhythm on all categories of risk-related information.