Changing competitive landscape, targeted cyber attacks and failure of critical infrastructure also rated highly both in terms of financial impact and likelihood to occur.
Strategic risks have dominated our annual survey in 2018 demonstrating a clear shift from external or operational concerns which have topped lists in previous years. Failure to innovate continues to plague Asia Pacific risk managers as their top concern in terms of financial impact. Changing competitive landscape, targeted cyber attacks and failure of critical infrastructure also rated highly both in terms of financial impact and likelihood to occur.
Respondents picked the changing competitive landscape (4/5) as the most likely risk for the year ahead. Failure to innovate was given a 3.4/5 likelihood. Risk managers believe the changing competitive landscape will have a moderate financial impact at 3.6/5, while failure to innovate will have a slightly bigger impact at 3.7/5.
StrategicRISK went to the market to gain more contextual insight for the concerns of risk managers.
Ryan Tan, vice president, mergers & acquisitions and corporate planning, StarHub: “It isn’t surprising that ‘changing competitive landscape’ and ‘macroeconomic change’ ranked very highly as risks. It reflects the holistic business perspective that risk managers have to adopt nowadays, where strategic business risks often feature very strongly in the set of risks we have to mitigate against.”
”Of course, cyber risks are now ‘top of the mind’ for any organization big or small, and it is no surprise that this also scored strongly as a key risk,” he added.
AirAsia Group Head of Risk and Insurance Suchitra Narayanan: “At AirAsia, whilst competition is of course intense, the market share and variety of routes means that for the ASEAN market at least, we don’t see the competitive landscape being our biggest risk, in the low cost carrier environment in which we operate.
“Certainly an economic slowdown in economies such as China have a significant impact to our growth and we are always looking for innovate ways to still encourage people to fly despite a lagging economy.
“I agree with cyber being rated as highly as it has been but whilst there are of course measures we do take to ensure we are always protected, recent examples of attacks demonstrate that an organisation can never stop looking ahead to understand and predict new attacks that might emerge; so this risk is preventable to an extent but it’s almost impossible for most organisations to not be a target.
“I would put the reputational risk higher up ( for AirAsia) as the brand health is incredibly important to us and is something we focus a lot on but we certainly don’t like to rest on our laurels - after all, the brand is so intrinsically linked to our growth strategy.”
Patrick E Smith, the founder of Acumen Advisory and Global Business Resilience Leader for food delivery service Deliveroo, says risk managers need to position their company for the future and incorporate technology as much as possible.
“The key positioning for the modern risk manager is to become immersed in the strategic future of their organisation. It is highly unlikely that sustainable and resilient organisations will have ignored the competitive advantage that digital technology can offer.”
Eamonn Cunningham, an Australia-based independent risk consultant, says risk managers should keep a close watch on their company’s competitive landscape, and look for possible threats: “That starts with an intimate knowledge of their organisation and the obstacles it faces in pursuit of its strategic plan and associated strategic initiatives. If you don’t have knowledge of these, you really cannot add value.
”Risk managers should be in constant dialogue with other divisions within their business. Talk to colleagues and get a sense of their view of the magnitude of these variables. This helps you discriminate between the relevant as opposed to the merely interesting.”