THE FUTURE OF SCENARIO-BASED RISK MANAGEMENT

R&C: What are the main types of business risk that organisations will be facing over the coming months and years? Do such risks generally exceed the tolerance levels of most enterprises?

Kimner: Organisations will face a variety of risks in the coming months and years, both internal and external. Some will be financial, such as credit, liquidity and market risk, and some nonfinancial, such as cyber, operational and reputation risk. These risks will span organisational functions – business, finance and operations – and any of them can impact organisations, especially those not prepared to manage or mitigate them. One way to prepare for and mitigate risks – or uncertainty – is to develop robust methods to identify, quantify, model and simulate potential impacts and losses under different scenarios. The goal is not to predict a specific event or when it will occur, but to understand the potential implications of a wide range of events and develop management strategies to mitigate issues.

Apr-Jun 2018 Issue

SAS

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