The latest technology and efficient use of data will help risk managers to improve their decision-making
Frashad Shah, Prolintas Group, head of risk management, believes organisations can harness the power of new technology, such as the Internet of Things, Big Data, Digital Image Processing, and Artificial Intelligence, to their advantage and shape informed risk management processes.
“With more data and technology, you’ll be in a better position to make better risk decisions,” Shah said, speaking as part of StrategicRisk’s #ChangingRisk series. “As the risk management fraternity, we can’t be stuck using yesterday’s tools and methods for today’s problems.”
“We are no strangers to data. Insurance guys have been using actuarial data for the past fifty-odd years for risk management purposes. We have used quantitative analysis that utilises copious amounts of data.
“What’s new is the application of data. The technological evolution has brought increased accuracy, visibility, and efficiency,” Shah adds.
Shah says technology is not a replacement for strong risk management procedures, but rather a tool to complement sound risk management practices.
“We need to realise it’s only a means to an end and not an end in itself. It supports the organisation’s risk culture…We need to embed a proper risk management culture in an organisation.”
While new technology can help risk managers, Shah warns it can also present risks. Cyber-risk, data-leakage, third-party risks, forensics, arising from data use need to be considered, he says. Shah believes risk exposure “will always be inherent to data and its utilisation”.
“There is so much data. If you don’t keep it properly, it could be used against us in a competitive situation.”
Shah believes new tech can help risk managers focus on high-level executive decision making, and lead to more “dynamic and instantaneous” risk assessment processes in the years to come.
“In a sense, all the automation that comes with big data analytics will help us focus on high-value decisions,” he adds.
“Data, insights and technology will lead to better analysis and decision-making,” Shah adds. “Faster and better quality information. But we need to be mindful that risk culture is what binds all these moving parts together into a working machine.”