JEDDAH – Reorganization of risk management is top priority by 2015 as social media now poses high risk, a new survey from Deloitte and Forbes Insights entitled “Aftershock: Adjusting to the New World of Risk Management” showed. In the Middle East alone, more than 86 percent of active web users use social media to get news, information and advice on various issues, said Deloitte earlier in the Arab Media Outlook survey. In addition, 70 percent of users have indicated that they use social media to voice their opinions, according to the report. As such, social media has become a top concern for executives across the Middle East. “Social media wasn't even on the radar a few years ago – now it's ranked among the top five sources of risk – the same level as financial risk,” said Fadi Sidani, partner in charge, Enterprise Risk Services, Deloitte Middle East. “The rise of social media is just another contributor to the volatile global risk environment that companies are being forced to navigate. The current marketplace seems to require that global organizations be nimble in their risk assessment approach, whether it's dealing with what employees post on social networks, or how they're coping with global regulatory changes or taking advantage of the opportunities that rewarded risks can create.” Despite advances in risk-related technologies as well as concern about unstable risks, the survey found that automation tools as well as tools used for continuously monitoring risk are underutilized. Most monitoring is done periodically, on a monthly, quarterly, biannual, or annual basis. “Based on the findings of this survey and our interactions with clients, we believe technology has the potential to play a breakout role in the management of risk, but many companies are still behind the curve in this area,” said Tariq Ajmal, partner in charge of Technology Services at Deloitte in the Middle East. “It is encouraging, however, that more than half of the respondents said their companies were planning to invest in continuous risk monitoring, and the tools that are available should not only help them with risk management overall, but also increase efficiency and decrease costs over time.” More than one-third (41 percent) of respondents said that they saw the global economic environment as the most important source of risk over the next three years, and nearly one-third put government spending and budget into that category. The top areas of concern regarding increased volatility over the next three years included financial risk (66 percent of respondents), followed by strategic risk (63 percent) and operational risk (58 percent). In addition, according to the Deloitte/Forbes Insights Survey, more than 50 percent of executives believe that regulatory, technological, and geopolitical risk will increase in volatility, and 55 percent of executives surveyed reported that their organizations will revamp their risk approach within the next 12 months. Roughly nine in 10 executives (91 percent) reported that they plan to reorganize their approach to risk management in some form over the next three years. When asked how they planned to accomplish this, the majority of executives (52 percent) said that they would elevate the profile of risk management throughout their organizations. Other areas viewed as key included reorganizing risk management processes (39 percent), additional training for staff (37 percent), incorporating new technology (31 percent), and integrating risk into strategic planning (28 percent). – SG
