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, cyber security and the cloud to unlock value and transform their operations, it is also playing a significant role in shaping that organization’s exposure to risk.
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 organization to review its risk landscape. This is higher than organizations 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. 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 organizations – constituting 5% 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 organizations 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.