The report gets to grips with how firms think about technology, both in terms of risks and opportunities, and its findings are likely to be echoed by the banking and wealth management industries.
Cyber and digital technology risks are a key concern for businesses and risk leaders in 2023, even as most of them (60 per cent) see generative artificial intelligence as a business opportunity, 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.
The findings showed that while 39 per cent of respondents think they are “highly” or “extremely” exposed to inflationary risks, cyber and digital technology risks are top concerns, at 37 per cent, and 32 per cent, respectively.
Also, machine learning, automation, cybersecurity and the cloud can unlock value and transform operations, it is also playing a significant role in shaping that organisation’s exposure to risk, the PwC report said.
“In a world that is persistently in a state of flux, 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,” Sam Samaratunga, global and UK head of risk services, PwC UK, said. “However, the survey highlights that if organisations don’t take risks, they will not progress.”
AI promise and risk
Technological change is shifting the risk agenda inside businesses, with more than half (57 per cent) 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 result is higher than organisations which are triggered into a review by a risk event (50 per cent) or entering new markets (46 per cent). 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 per cent see GenAI as an opportunity, compared to just 35 per cent who see changes in regulation, or 28 per cent who see supply chain disruption as an opportunity.
“Risk Pioneers”, a top performing group of organisations – constituting 5 per cent of survey respondents and spread across all industries – are blazing a trail in reframing risk as a value creation opportunity, PwC said. They are overwhelmingly (73 per cent vs 53 per cent 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.
“The age of the benign risk environment is over for the foreseeable future, amplified by the increasing pace and impact of technology change,” Simon Perry, markets and services leader, risk, PwC UK, added.