Optimism amongst risk managers led to deprioritisation of core risk management: Origami Risk

Origami Risk, the risk, safety, and insurance Software as a Service (SaaS) technology firm, in its third annual State of Risk report, has disclosed the trend in deprioritisation of core risk management activities due to the increased optimism among risk managers.

The firm polled 240 risk professionals across the United States and Europe and found that those responding to the survey downgraded their assessment of the priority their organisation puts on risk management by nearly a full point, from 7.45 to 6.69 out of 10.

Earne Bentley, President, Risk Division, Origami, commented, “This year’s State of Risk report suggests that there’s an encouraging level of optimism in the risk management community. A deeper dive into the responses, however, doesn’t support this position.

“There has been a marked deprioritisation of risk management, pulling back on technology investments, slowing of integration efforts, and stalling on supply chain improvement efforts. All of these at a time when novel risks are on the rise.”

Despite 80% of respondents claiming to be either “moderately prepared or higher”, data on the hard actions being taken doesn’t support these optimistic assessments.

Bentley explains, “These findings could be a result of prevailing macroeconomic pressures, a natural resetting after the massive investments we saw during the pandemic, or the need to redirect resources to other critical strategic priorities.

“But with so many indicators all pointing toward a backslide from the hard-earned gains made after the pandemic, overconfidence and complacency appear creeping in when the risk environment demands agility and foresight.”

The report highlights that despite a volatile year due to geo-political tension, economic uncertainty, the acceleration of risks such as AI and climate change, and widespread supply chain disruption, the percentage of respondents who had “fully connected” risks with strategic objectives dropped by nearly one third to 32%, and despite significant supply chain disruption over the past year, half of respondents had made no changes to their supply chain.

Bentley concluded, “The risk management community has risen admirably to recent challenges. With tomorrow’s challenges right around the corner, those who can apply past learnings to novel risk and embrace the technology available to empower them will thrive.”