Future of risk

As businesses face a rising tide of risk, organisations should restructure the fundamentals of how they handle uncertainty.

Today, managing risk is more challenging than ever. Organisations are facing an array of reputational, environmental, regulatory and societal forces. And unfortunately, using the same recipe — and merely increasing the scale of your risk operation — is no longer viable. The way forward requires the C-suite to change its mindset to completely embrace risk as an enabler and an asset that can drive stakeholder value. Without that collective focus, the opportunities from the modern risk environment cannot be properly captured.

To meet these challenges, organisations should fundamentally transform their overall approach to risk. This involves giving the business clarity into the structure, function, purpose and value of risk, and aligning enterprise risk management with the strategic objectives of the business. It also requires building proactive enterprise risk capabilities, shifting the risk function from “compliance and control” to value creation, and leveraging technology, including artificial intelligence (AI) and generative AI (gen AI), to accelerate these changes.

To explore how executives expect their organisations to mitigate external and internal risks in the face of a rapidly changing business environment, KPMG International conducted a global survey of 400 executives in February and March 2024. The responses — and the accompanying insights in this paper — can inform organisations’ quest to chart the future of their risk function.

Mike Daughton and our Risk & Regulatory consulting team discuss.