- 37% of organisations believe they are “highly” or “extremely” exposed to cyber risks – narrowly behind inflationary risks (39%) – while leaders responsible for managing risk rank cyber higher than inflation
- Only 10% of those surveyed are using advanced and predictive analytics to refine and innovate risk-management
- Almost three-fifths (57%) say preparing for investments in technology is the single biggest trigger to review their risk landscape
- ‘Risk Pioneers’ are overwhelmingly (73%) likely to have an enterprise-wide technology strategy, see GenAI as an opportunity, and have greater risk appetite alignment with teams
Cyber and digital technology risks are a key concern for businesses and risk leaders in 2023, even as 60% see GenAI as an opportunity for their businesses, according to PwC’s 2023 Global Risk Survey.
More than 3,900 business and risks leaders – from the boardroom and C-suite, and across tech, operations, finance, risk and audit – were surveyed in 2023, with the findings showing that while 39% of respondents feel “highly” or “extremely” exposed to inflationary risks, cyber and digital technology risks are top concerns, at 37%, and 32%, respectively.
The survey also finds that as businesses look to new and emerging technologies such as Generative AI, machine learning, automation, cybersecurity and the cloud to unlock value and transform their operations, it is also playing a significant role in shaping that organisation’s exposure to risk.
Sam Samaratunga, Global and UK Head of Risk Services, PwC UK, said:
“In a world that is persistently in a state of flux, it is clear that organisations need to transform, with new and emerging technologies playing a critical role in that transformation. So it is no surprise that cyber and digital risks are top-of-mind in 2023, with those leaders responsible for managing risk ranking cyber higher than inflation. However, the survey highlights that if organisations don’t take risks, they will not progress. So if organisations are to grow, build resilience, and see sustained, long-term outcomes, they should follow the lead of ‘Risk Pioneers’ – organisations with a proactive approach to risk, an enterprise-wide risk strategy, and strong alignment on risk appetite between teams.”
GenAI is viewed as an opportunity, but is also triggering risk reviews
Technological change is shifting the risk agenda inside businesses, with 57% of respondents noting that preparing for technology investments, from cloud to emerging technologies such as GenAI, is the single biggest trigger for an organisation to review its risk landscape. This is higher than organisations which are triggered into a review by a risk event (50%) or entering new markets (46%). Technology disruptors, those that are more focused on value creation than value protection, are also much more likely to be seen as opportunities, rather than risks, compared to other external non-tech disruptors.[1] For example, 60% see GenAI as an opportunity, compared to just 35% who see changes in regulation, or 28% who see supply chain disruption as an opportunity.
‘Risk Pioneers’ are leading the way
‘Risk Pioneers’, a top performing group of organisations – constituting 5%[2] of survey respondents and spread across all industries – are blazing a trail in reframing risk as a value creation opportunity. They are overwhelmingly (73% v 53% of those surveyed) likely to have an enterprise-wide technology strategy and roadmap; are 1.8 times more likely to say they are “very confident” in balancing growth and managing risk; 1.8 times more likely to see GenAI as fully an opportunity than risk; and are 1.6 times more likely to proactively take risk to create opportunities versus prioritising safe or low risk strategies. They are also significantly more likely to be upskilling internal teams on risk-related capabilities and express greater alignment with their CEO/board on levels of risk appetite (32% matching that of their CEO and board, compared to 22% of overall respondents).
Closing the gap
While there is a clear ambition among most organisations to take a more tech-powered approach to risk, there is a clear gap in capabilities and execution: just one in ten (10%) are already using advanced and predictive analytics, cutting-edge tech and data for managing risk and are continuously refining and innovating. Furthermore, many sit at the initial and developing stages of tech/data maturity, with just 14% exploring or having just started using technology and data for risk management, whereas less than one-quarter (24%) are using basic technology and data tools for risk management or have established technology and data procedures for risk management.
Simon Perry, Markets & Services Leader – Risk, PwC UK, concluded:
“The age of the benign risk environment is over for the foreseeable future, amplified by the increasing pace and impact of technology change. These threats mean taking risk intelligently – powered by technology and framed by growth and opportunity – is now critical to adapting and reinventing yourself in this constantly changing world to both protect and create value.”
Rishi Anand, Risk Consulting Partner at PwC Thailand, shared his insights on Thailand’s risk landscape:
“Thai businesses haven’t fully embraced technology to manage risks, despite facing significant cybersecurity threats.
“Many companies don’t have risk identification, analysis and mitigation processes. Others have risk-monitoring capabilities, but lack the technology for effective risk management as they still rely on outdated and silo approaches. Given the threats, it’s imperative that Thai companies embrace risk management technology. The right technology will allow businesses to identify risks from various sources, reduce errors, and manage and monitor risk holistically.”
Rishi also revealed there is a mixed reaction to how disruptive technology such as generative AI will change the business environment.
“Some companies see generative AI as a valuable asset for reducing manual tasks, or as a tool to add value. And while most have concerns about bias, hallucination, security and privacy, there are many companies who want a customised version of generative AI to fit their business needs,” Rishi said.
[1] Learn more about the archetypes identified by PwC – Pioneer, Disruptor, Innovator, Defender, Pragmatist – in the full PwC 2023 Global Risk Survey.
[2] Risk Pioneers are likely to be the CEOs and the board (34%) and have seen revenue increase in the past six to nine months. See the full attributes in the PwC 2023 Global Risk Survey.