Risk Management Trends What to Watch in 2024

Although 2024 is a promising year, it also has come forth with risk management challenges, that can greatly impact organisations, especially AI innovation and integration. Business leaders facing challenges to navigate through a landscape fraught with uncertainties and complexities is a sign that organisations need to consider the key risk management trends and find suitable solutions.  

In this blog, we'll explore the key risk management trends that are expected to shape 2024 and discuss how forward-thinking organisations can leverage these trends to drive success. 

Evolving Risk Landscape:  

Organisational risk registers continue to expand each year, reflecting the emergence of new risk types associated with digitisation, information security, environmental and social issues, as well as escalating costs of raw materials and energy prices. With ambitious corporate strategies driving aggressive growth agendas, coupled with rapid technological advancements, governance, risk, and compliance (GRC) functions are becoming increasingly crucial for organisational resilience and success. 

Furthermore, insurance risks, workplace health and safety risks etc., are also becoming crucial to tackle. 

Risk Management Trends for 2024:  

Experts predict a challenging year, with global growth expected to decelerate due to higher interest rates and soaring prices for goods and services. Geopolitical tensions, ongoing conflicts, and national elections add further uncertainty, underscoring the importance of effective risk management strategies for organisations. 

Below are the top risk management trends of 2024: 

1) ESG Emergence:  

In 2024, Environmental, Social, and Governance (ESG) considerations have taken center stage as consumers increasingly prioritise socially ethical companies. Organizations will need to address ESG issues relevant to their business to maintain competitiveness and long-term profitability. 

2) Focus on Regulatory Compliance and Cybersecurity:  

Regulatory change, compliance issues, and cybersecurity threats remain top concerns for organizations. As digital transformation accelerates, ensuring robust cybersecurity measures and managing regulatory changes will be imperative for business continuity and reputation protection. 

3) Ethics, Governance, and Managing AI  

In 2024, AI's rise has brought ethics, governance, and risk management into focus. So, there is a need for teams to understand AI operating models and outcomes to prevent bias. Furthermore, teams should grasp these concepts to ensure responsible AI use. 

4) AI in products and services  

Using AI in products and services has become a major trend, with a focus on governance and responsible use. 

AI use, especially generative AI, is anticipated to expand beyond experiments to products and services, emphasising the need for companies to maintain support functions aligned with technological advancements. 

5) Consolidated Reporting and Single-platform Solutions  

There's a trend toward consolidating reporting and using one platform for solutions. 

With a growing interest in consolidated reporting and solutions, businesses are shifting to one platform, reflecting the industry's shift towards unified solutions for reporting and risk management. 

How will the Risk Landscape change in 2024?  

Moving from 2023 to 2024 brings new challenges and opportunities. Here's how the risk landscape will shift, comparing the two years. 

1) Model Risk Management and AI Integration  

Using AI in risk management means better model risk management is necessary. 

The model risk management will grow as companies adopt AI, emphasising the importance of rigorous validation and continuous monitoring for AI use. 

2) Geopolitical Risks in a Major Election Year  

With several major elections scheduled worldwide in 2024, geopolitical risks will come to the forefront. Political uncertainty and geopolitical tensions can have far-reaching implications for businesses, affecting trade policies, regulatory environments, and market stability. Organisations will need to closely monitor geopolitical developments and adapt their risk strategies accordingly to mitigate potential disruptions. 

3) Rise of Resilience Roles and Teams 

2024 is and will continue witnessing the emergence of new senior leadership roles focused on operational resilience within organisations. As businesses face increasingly complex and interconnected risks, the importance of building resilience capabilities becomes paramount. Resilience teams will play a pivotal role in proactively identifying and addressing potential threats, ensuring business continuity, and enhancing overall organizational resilience.  

8 GRC (Governance Risk and Compliance) Trends to Look out for in 2024: 

We have listed below 8 GRC trends to look out for in 2024: 

1) Strategic Risk Management:  

Organisations should view risk as both a threat and an opportunity, aligning risk management with strategic goals to drive informed decision-making. 

2) IT GRC Integration:  

With the digital landscape evolving rapidly, organizations must manage IT-related risks alongside traditional physical risks. 

3) AI-Based Knowledge-Centric GRC:  

Leveraging AI technologies for risk assessment, threat intelligence, and fraud detection will enhance risk management effectiveness. 

4) Focus on Risk and Resilience:  

Strengthening resilience through proactive risk management and business continuity planning will be crucial for organisational sustainability. 

5) ESG Reporting Mandates:  

New reporting requirements will drive the adoption of ESG reporting standards, necessitating robust GRC frameworks to capture and report ESG-related information. 

6) Regulatory Compliance:  

Heightened regulatory scrutiny demands organizations to streamline regulatory change management processes and ensure compliance with evolving regulations. 

7) Continuous Third-Party Risk Monitoring:  

Real-time insights into vendor performance and compliance have become essential for managing supply chain risks effectively. 

8) Objective-Driven GRC:  

Aligning risk management with strategic objectives and governance procedures will enable organisations to pursue their goals while managing associated risks. 

In 2024, organisations must proactively address evolving risks and embrace innovative GRC strategies to navigate uncertainty successfully. They need to focus on ethics in AI, AI's use in products, and consolidated reporting. Furthermore, staying informed and agile can help organisations. 

By leveraging the latest trends in risk management, organizations can build resilience, drive strategic growth, and thrive in an increasingly complex business environment.  

How Can Lahebo Help? 

A robust risk and compliance management software will play a key role in helping organisation pace up with the evolving risk landscape. It will not only help them report and mitigate risks but also help them track risk trends on a centralised platform, visible to key stakeholders. 

Lahebo’s real time solutions and a simplified dashboard can help organisations be ahead and tackle risks promptly.  

Furthermore, Lahebo also offers notifications on the latest regulatory updates, which will prevent businesses from missing any important updates. 

Why don’t you book a demo to learn about Lahebo and how it can help your business ace the risk management game in 2024? 

Contact our team for more information at support@lahebo.com 

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