technology

Aon, a founding member of The Risk Institute, released their 2017 Global Risk Management Survey today. Conducted in the fourth quarter of 2016, the bi-annual survey gathered input from 1,843 respondents at public and private companies around the world. It finds that trends in economics, demographics and geopolitics, as well as technology advancements, are transforming traditional risks and adding new urgency and complexity to old challenges.

Top discussion points of the survey include:

damage to reputation/brand as a top concern
political risk/uncertainties entering the top 10 risk list
Cyber Crime ranking the number one risk to North American businesses
disruptive technologies/innovation predicted to rise in risk
risk preparedness at its lowest level since 2007

Damage to reputation/brand is consistently the top-ranked risk by businesses. Companies have become vulnerable due to the amplified negative impact social media has on cases of defective products, fraudulent business practices, and corruption.

Cyber Crime is now the top concern among businesses in North America, jumping from number nine to number five on the top risk list. Cyber breaches are increasing and incident response plans have become more complex, making Cyber Crime a costly business interruption.

Political risk/uncertainties have recently re-entered the top 10 risk list at number nine. The survey finds that developed nations that were traditionally associated with political stability are becoming new sources of volatility and uncertainty. Additionally, according to Aon’s latest 2017 Risk Maps, trade protectionism is on the rise while terrorism and political violence ratings are the highest they have been since 2013.

“We are living in a challenging new reality for companies of all sizes around the world. There are many emerging influences that are creating opportunity, but at the same time, creating risks that need to be managed,” said Rory Moloney, chief executive officer for Aon Global Risk Consulting. “As the risk landscape for commerce evolves, businesses can no longer rely solely on traditional risk mitigation or risk transfer tactics. They must take a cross-functional approach to risk management and explore different ways to cope with these new complexities.”

Disruptive technologies/innovation is a concerning risk emerging for the future. It is currently ranked number twenty but is expected to jump to the top ten within a few years. New technologies such as drones, driverless cars, and advanced robotics have caused an increased awareness of impacts for businesses.

The top 10 risks are:

Damage to reputation/brand
Economic slowdown/slow recovery
Increasing competition
Regulatory/legislative changes
Cyber crime/hacking/viruses/malicious codes
Failure to innovate/meet customer needs
Failure to attract or retain top talent
Business interruption
Political risk/uncertainties
Third party liability (including E&O)

The full report can be accessed at www.aon.com/2017GlobalRisk.

By Professor Bernadette A. Minton
Academic Director and Interim Executive Director, The Risk Institute
Arthur E. Shepard Endowed Professor in Insurance
Professor of Finance
The Ohio State University Fisher College of Business

It’s almost 2016 (or it is already, depending on when you’re reading this). Everything is digital, and so you took the plunge and developed a mobile app for your customers. The launch of your new mobile app was supposed to streamline and enhance the customer experience, but since it was released it seems as if your customers and your employees rue the day the app appeared. Is it possible that this app has actually been detrimental to your business? Have you found yourself thinking, why haven’t my customers and my employees embraced this new technology?

From Apple to Zillow, digital disruption – the impact of new technologies on the existing consumer brand experience – challenges consumer business. The first thought that comes to mind is that digital disruptions continue to raise consumer expectations about the brand and their online and in-store experiences.

Yet, there is another side. One that is not often considered, but equally important: the digital expectations of the company’s employees. The employees who are charged with innovating the brand and enhancing customers’ brand experiences are also savvy digital users themselves with their own increasingly elevated digital expectations. Senior executives need to consider how digital disruptions also are influencing and modifying their employees’ behaviors and expectations.

At our upcoming Risk Series, Digital Disruption: Brand, Strategy and Technology, taking place on January 21, 2016, our session leaders Deborah Mitchell, Clinical Professor of Marketing, with The Ohio State University Fisher College of Business, and Keith Strier, Principal, with EY Advisory Strategy and Practice and Founder of IDEAS (Innovation, Digital Enterprise & Agile Strategy) collaborate to discuss applications of current research on consumer behavior to digital engagement with customers and employees to understand your organization’s digital vulnerabilities and opportunities.

I invite you to join us and other executives in this interactive session as we engage in conversations about the leading strategies to understand customers’ and employees’ digital experiences as well as discuss the current challenges firms face in today’s digital environment. You will gain insights into how you can develop an enterprisewide digital strategy aligned with your firm’s corporate strategy and brand vision. You will also be in the position of leveraging, and not just mitigating, digital disruptions with your employees and with your customers.

The Risk Institute Executive Education Series will continue on January 21, 2016 with Digital Disruption: Brand, Strategy and Technology, a half-day course for executives. For more information, or to sign up for the session, visit FISHER.OSU.EDU/RISK

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Can New Technologies Undermine Your Company’s Brand? The Employee and Customer Experience