Dun & Bradstreet, a company that provides commercial data, analytics and insights for business, recently published a study titled The (R)evolution of Risk Management. It reveals that while finance leaders remain tasked with business profitability, their remit has expanded to include the sharing of data across the organisation and management of risk.
As the basis of the study Dun & Bradstreet used an online survey that targeted finance professionals in roles ranging from end user to executive within companies of all sizes in the US, UK, and Canada. Approximately 1,100 responses were received. Some of the key points the study made are listed below:
- Monitoring risks within the customer, supplier, or partner base ranked as the top challenge facing finance leaders today, with 38 percent calling this a “high” risk.
- The second biggest concern for finance leaders was found to be forecasting or predicting risk, while the third was growing profitability.
- On the other hand over 75 percent labelled “scaling operations” a “low” or “moderate” risk, thereby making it the lowest-risk initiative.
- Over 60 percent say that their data is siloed, with over half reporting difficulty sharing, linking and using data to drive their risk management strategies.
- Less than 20 percent believe their company is using modern risk management tools effectively.
Tim Vine, Head of European Trade Credit at Dun & Bradstreet, made the following comment on the report: “A changing business environment, coupled with political and economic uncertainty, is making it increasingly challenging for finance leaders to manage risk effectively. Data-driven tools can uncover valuable insights to inform strategic decisions and drive business performance, but our report shows that adoption of these tools is still relatively low. Finance leaders who are able to leverage data can help their organisation navigate uncertainties in the market, manage risks and grow profitability.”
The (R)evolution of Risk Management argues that perhaps “the greatest risk that finance leaders face – and indeed all business leaders – is that their time, their energy, and their creativity are invested so heavily in their todays and not their tomorrows.” The study believes short-term fixes using alternative and modern approaches will not necessarily prepare businesses for future growth and effective management, and encourages finances leaders to develop long-term visions for their organisations.