The way we live – with our kitchens transformed into classrooms and offices – is filled with new rhythms and habits. One risk that dropped out of the top 10 this year is the concern that the rapid speed of disruptive innovations and/or new technologies within the industry may outpace the organization’s ability to compete and/or manage the risk appropriately without making significant changes to the business model. Concurrently, multinational companies – and their dense trans-Pacific supply chains – will be key players shaping how far US-China competition upends established business patterns. top risks expected to increase in 2020 respondents to global risks perception survey (%) economic confrontation/frictions between major powers 78.5% domestic political polarisation 78.4% extreme heat waves 77.1% destruction of natural ecosystems 76.2% cyber attacks: disruption of operations and infrastructure 76.1% protectionism regarding trade and investment For some, the pandemic brought time to a standstill. What’s at stake is sustaining a workforce with the requisite talent and skills needed to think creatively in a rapidly changing digital marketplace, execute high-performance business models and implement increasingly demanding growth strategies. This fragmentation, and the complexity it creates, will persist through the end of 2020 and most likely far beyond. Helping organisations succeed in a volatile world, © Control Risks Group Holdings Ltd registration no.01548306, 5. Respondents remain noticeably concerned about the ability of their organizations — relative to competitors — to adjust their existing operations, IT infrastructure and digital capabilities to meet performance expectations. Without access to the talent that understands the technologies and how they can be used, organizations face being left behind competitors who can react quickly to assimilate innovations into the business. Typically, they travel in the same direction. And for just about everyone, the question of what happened yesterday, last week or last month has become a distorted guessing game. : Who Governs the US? That’s why, for the seventh consecutive year, AXA has conducted its annual survey of emerging risks. The presence of this risk, coupled with concerns over resistance to change, reflects on the state of an organization’s overall culture. The disruption to our very sense of time is profound but little discussed – so much else is more urgent. Increasingly sophisticated attacks by perpetrators of cybercrime add to the uncertainty. The pandemic, however, seems to be the moment the world wasn’t waiting for, and apparently wasn’t prepared for, either. As the expanding digital economy enables businesses and third-party organizations to house sensitive information obtained in many ways, the potential exposure of that information raises such questions as how much data is too much data, does the organization need effective guardrails around data collection to manage its risk, and is the monetizing of the data collected delivering a return on investment that makes the risk of collecting and managing the data worthwhile? If so, that problem can be solved through education and constant communication. Succession challenges and talent acquisition and retention (2). The geopolitical turmoil the pandemic has sparked will see cyber operations – always inexpensive and easy to deny – spike as a tactic. Just as the world entered the crisis with a crunching of gears and multiple wrong turns, it is reversing out of it in the same manner. Here are ten of the top geopolitical risks to watch out for in 2020: 2020 elections : Either a Trump reelection or a victory for a Democratic challenger is bound to deepen US political tribalism. The pandemic has stood that principle on its head. Respondents recognize that reality, with two-thirds of our respondents rating this risk as a significant impact risk concern for 2020. Each of the issues, and many more identified in our trends report, represent a potential area of risk. Senior executives and their boards may want to consider the above risks in evaluating the risks inherent in their organization’s operations and the board’s risk oversight focus for the coming year. Watch all of them, with an eye toward their political longevity. Years of simmering populism, nationalism and protectionism were never going to build the sort of trust and transparency countries need to work effectively with each other in a time of crisis. Respondents continue to highlight the need to give attention to the overall culture of the organization to ensure it is sufficient to encourage the timely identification and escalation of risk issues. It’s a phrase loaded – falsely, perhaps – with suggestions of a return to something familiar or at least predictable. While the overall global economy remains relatively strong, there has been growing speculation – particularly in the United States – that the long streak of economic growth may stall in the near term. 4. Interestingly, economic concerns are in the top-five list of risks for all regions of the world, except in North America. If there’s one emerging risk that will dominate 2020, it will be the development of natural disasters and the consequential damage they impose on livelihoods across the globe. Interesting shifts in the 2020 top 10 risks. Digital effectiveness remains in the top three risks and opportunities … The distant, unknowable future usually holds the greatest risk; our comfort zone is the short term, where nothing hides out of sight. Download eBook: Top 10 Risk & Compliance Trends for 2020. Prior to the pandemic, a number of countries presented a volatile mix of political instability and economic vulnerability. Accidental missteps in how organizations handle these operations may inadvertently reveal information deemed to be private or proprietary. The drivers of activism are being supercharged. However, putting pressing public health concerns aside momentarily, the COVID-19 pandemic has intensified and accelerated most of the risks and trends that pre-dated the disease. Companies with global footprints will themselves have to become leaders in navigating a minefield of conflicting political priorities, regulatory regimes and pandemic de-escalation. We’ve lived with growing levels of geopolitical risk for nearly a decade, but without a true international crisis. Most people think that the physical and virtual worlds are separate, but in reality the virtual world is very much affected by the natural disasters of the physical world. 9. To thrive in the digital age, organizations need to think and act digitally and have the capabilities to execute digital plans. The Top Geopolitical Risks of 2020 December 12, 2019 Rising geopolitical and geo-economic tensions represent the most urgent global risks, and will only continue to escalate in 2020. Conducted online in the fall of 2019, the survey asked each respondent to rate 30 individual risk issues using a 10-point scale, where a score of 1 reflects “No Impact at All” and a score of 10 reflects “Extensive Impact” to their organization over the next year. Continued vigilance is critical. And a world waiting for the US to elect – or re-elect – a president will not wait idly on the side lines. Based on quantitative and qualitative surveys, the report lays out how each respondent group views key risks. Succession challenges and talent acquisition and retention (2) The risk of succession challenges … The US has held successful presidential elections at times of national crisis before – think 1864 or 1968 – but not in the crucible of a deadly global pandemic. Talent and culture risks and technology and innovation risks dominate the top 10. If organizations cannot adjust their operations, legacy IT infrastructure and digital capabilities (as discussed above), they may not meet the expectations of their core customers in a manner sufficient to retain their loyalty. The unprecedented alignment of capability and intent set 2020 up to be the year when we would see a large-scale attack on critical infrastructure. Governments will be held to account for their death rates and infection counts. The “new normal” has become a cliché for the world we are feeling our way towards. Save this article. 3 Theft and fraud. The adoption of digital technologies in transforming the business may require new skills that the organization may not be able to attract or retain (NEW). While dropping slightly to the number four position for 2020, it is nonetheless a significant risk concern for 67 percent of our respondents. 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