In a world that throws disruptive curveballs, from global health crises to geopolitical turmoil, 63% of businesses are missing out on the mature risk management strategies essential for tackling such rapid changes. A recent Boston Consulting Group (BCG) report sheds light on a stark divide: Although 71% of well-prepared firms recognize the vital role of risk management in crisis navigation, only 37% of their less-prepared peers do. This gap signals [more than a discrepancy in readiness; it points to] a strategic shortfall that could decide whether a company just survives or truly thrives amidst unpredictability.
Enter risk intelligence — the game-changer geared towards turning potential threats into strategic opportunities. We’re set to delve into the nuances of risk intelligence, demonstrating how it enables businesses to transform uncertainty into a springboard for innovation and growth.
Adding to the conversation, our Director of GRC Products, Ryan Napoleone, brought his expertise to the Risk Management Podcast with Boris Agranovich. He elaborates on how risk intelligence goes beyond protection — equipping companies to advance with intent. Join us as we dig into their discussion, highlighting the critical role of a risk intelligence platform in empowering risk managers to guide their companies into an exciting new era.
What is risk intelligence: A paradigm shift for risk professionals
At its core, risk intelligence harnesses the potential of risks as drivers of value. Napoleone defines it as “an advanced and evolved concept that outperforms traditional risk management practices.” It’s not just about identifying and mitigating risks; it’s about understanding their interconnectedness and potential impact on an organization’s objectives. By shifting your risk approach and leveraging a risk intelligence platform, you can uncover opportunities within each risk, embracing the upsides of the downsides. As Napoleone emphasizes, risk intelligence aims to “optimize decision-making and proactively identify opportunities to leverage risk and drive strategic initiatives.”
Risk management vs. risk intelligence: key differences
While risk management is about minimizing negative impacts, risk intelligence transcends these boundaries. Napoleone clarifies the differences: “Risk intelligence signifies an evolution. It goes beyond traditional risk management practices.” Using a risk intelligence platform expands the scope beyond risk avoidance and reduction, driving proactive decision-making and strategic alignment. This approach presents a shift from isolated risk assessments to an integrated approach that aligns risk management with overall business objectives.
- Scope and purpose: Risk intelligence focuses on leveraging opportunities within risks and aligning with strategic goals.
- Objectives: Unlike risk management’s focus on risk avoidance and reduction (often reactively), utilizing a risk intelligence platform optimizes decisions for strategic outcomes.
- Focus: Risk intelligence considers not only the potential downsides of risks but also the opportunities they present.
- Integration with strategy: While risk management is often seen as a compliance-driven activity, risk intelligence aims to integrate risk into the strategic decision-making process.
- Continuous learning and improvement: Risk intelligence nurtures a culture of risk awareness and ownership throughout the organization. “It’s about encouraging open communication, promoting collaboration, and fostering an environment where everyone feels comfortable sharing incidents and insights related to risks,” Napoleone explains.
How a risk intelligence platform helps drive actionable data insights
The journey toward risk intelligence is paved with data, but it’s not just about accumulating data — it’s about having the ability to derive meaningful, actionable insights rapidly. Napoleone highlights the role of a risk intelligence platform in this process.
Raw data ingestion
At the heart of this process lies data ingestion — a method of pulling data from diverse sources scattered or siloed across the organizational landscape. “Capturing risk data from various sources, including existing business systems, ERP platforms, and external third-party sources, forms the foundation for unlocking invaluable insights,” Napoleone stresses.
Risk data integration
Data ingestion is just the first step. Napoleone emphasizes the significance of integrating incident reports, assessments, audit findings, and external sources. By interconnecting these diverse data points, organizations can enrich their risk perspectives, comprehensively understanding the interconnectedness of potential risks and their impact on organizational objectives.
To truly harness the potential of risk data, contextual enrichment becomes paramount. Integrating data from different sources and enhancing it with relevant contextual information empowers organizations to establish meaningful relationships. By identifying trends, patterns, and correlations, they can move beyond mere data accumulation to a realm of actionable insights.
Through this comprehensive and holistic view of the risk landscape, a risk intelligence platform enables organizations to identify potential pitfalls and promising opportunities. With the help of advanced analytics and business intelligence that risk intelligence platforms like Resolver provide, organizations can navigate the data maze, transforming raw information into informed choices.
Transitioning towards risk intelligence: Guiding steps
Transitioning from conventional risk management to the realm of risk intelligence demands more than just wishful thinking—it requires actionable steps. Napoleone offers guiding principles to navigate this transformative journey:
- Strategic approach: Move beyond the confines of reactive risk management and embrace a strategic paradigm shift. As Napoleone underscores, “Risk management aspires to enrich resource allocation and focuses on how risk impacts what the business wants to accomplish.” This step aligns risk management with the overarching business objectives, unlocking a powerful path to risk intelligence.
- Engage and collaborate: The journey to risk intelligence is a collective effort. Engaging stakeholders and fostering collaboration across departments is essential. Napoleone emphasizes the importance of a seat at the decision-making table, highlighting how executives should understand the role of risk management. He states, “Reaching out to the executive team and getting a seat at that table is extremely important.” This collaborative synergy generates a culture where risk-aware decision-making becomes intrinsic to every facet of the organization.
- Leverage technology: The adoption of technology isn’t just a buzzword — it’s a strategic enabler. Napoleone emphasizes the significance of technology in freeing up resources from manual tasks, ultimately focusing on value-added endeavors. He stresses, “By using technology to automate data collection, analysis, and reporting, risk managers can spend more time on value-added tasks.” By embracing automation and cutting down on time-consuming processes, risk managers can channel their efforts into strategic initiatives that drive organizational growth.
- Foster a risk-aware culture: Napoleone underscores the role of a strong risk culture in the transformation toward risk intelligence. It’s not about isolated risk management; it’s about integrating risk awareness into the organization’s DNA. Creating an environment where open communication thrives, where sharing insights and incidents related to risks is encouraged, can make the most significant impact. “We’re there not to get people in trouble,” Napoleone explains, “but to work with them and do what’s best for the organization and everyone in general.”
A common misconception is that risk management solely belongs to a specific team. Risk intelligence is a collaborative endeavor involving all levels of the organization. Different risk functions, including compliance, audit, and regulatory compliance, come together for a holistic risk management approach. This collaboration enables organizations to comprehensively identify, assess, and respond to risks, bringing together diverse perspectives for more effective decision-making.
How Resolver’s powerful Risk Intelligence Platform transforms risk management
Shift from reactive to proactive and agile risk management with Resolver’s risk intelligence platform. No longer just a bearer of bad news, your scattered risk data becomes a catalyst for informed decisions, earning you a strategic seat at the table. Resolver’s platform consolidates diverse risk information, delivering accuracy and relevance to drive high-quality outcomes. This holistic perspective reduces coordination fatigue, optimizes resource allocation, and propels strategic initiatives through insightful analysis and effective communication.
Seamlessly collect risk data from every corner of your business, connect and integrate it, and finally, calibrate each risk’s business value. Experience the shift as risk evolves from a barrier to a strategic partner driving your business forward.
Ready to see how Resolver’s risk intelligence software revolutionizes risk management? Register for a brief video walkthrough of our enterprise risk management software and step into the future of risk intelligence today.