Daily News: March 21, 2014

PwC: Companies Exposed to Critical Gaps in Risk Management

Internal business changes intended to address dynamic market shifts have created a more complex risk landscape for businesses around the globe. Compounding this problem, according to the PwC US Risk in Review report, “Re-evaluating how your company addresses risk,” is that traditional risk management systems have not evolved fast enough to monitor, track and manage today’s intensified risk climate.

According to a survey of 1,940 business executives and risk managers worldwide, business risks are rising across the board, with 75% of executives reporting increased risks to their business. A majority of executives foresee continued significant market changes that will dramatically impact their companies, particularly in three key areas over the next 18 months:

  • Technological change and related IT risks (58% of respondents)
  • Increasing regulatory complexity (56% of respondents)
  • Rapidly changing customer needs (50% of respondents)
  • In contrast, only 42% of respondents ranked global economic shifts and uncertainty as a major driver of change, compared to last year when increased recessionary pressures were the leading risk coming in at 72%.

    “In response to these dynamic shifts in the market, organizations across all sectors are undertaking dramatic business transformations, altering their strategies and driving radical internal change,” said Dean Simone, leader of PwC’s US Risk Assurance practice. “Our survey shows that 75% of respondents reported that they are in some stage of transformation, and 71% ranked business transformation as the biggest internal driver of change over the next 18 months. The impact of transformation is especially important because of its capacity to create cascading risk effects across many business activities and open capability gaps in risk management, particularly around data management, business strategy and technology.”

    To download a full copy of the Risk in Review report, please visit: http://www.pwc.com/us/riskinreview