Risk management has evolved significantly over the years, adapting to the changing landscape of global business, technology and regulations. Here is a historical perspective on how risk management has evolved over the years.
The early Phase: 1950s-1970s
- During this period the focus of Risk Management was synonymous with Insurance Management Organisations focused on risk transfer activities in identification and transfer of nak toimurance companies as a mitigation measure against potential financial losses. Risks to financial stability and loss prevention were primary concerns
Expansion to Operational Risks: 1980s-1990s
- The increasing complexity of business operations coupled with the introduction of new technologa necessitated organisations to consider operational risks such as supply chain disruptions, production processes, etc. This brought in the concept of Enterprise Risk Management (ERM) where risks are managed in a holatic approach by integrating risk management across the entire organisation,
Regulatory Compliance and Corporate Governance: 2000s
- Need for stronger Corporate Governance emerged due to corporate scandals like Ervon Regulatory compliances increased to tighten internal controls, enhance transparency accountability and reporting Other regulations such anti-money laundering laws (AML). Data Protection and other industry specific regulations were introduced Risk management focus was on Governance and Regulatory Compliance Risks
Digital Transformation and Cybersecurity 2000s
- With organisations relying more and more on digital technologies, new risks such as cyber security emerged as a critical concem to protect against dots breaches and online threats Around this time, Environmental Social, and Governance (ESG) risk started to gain prominence due to stakeholder demands
Integrated and Proactive Risk Management: 2020
- Business Continuity Planning came into prominence Risk Management due to impact of Covid-19 pandemic Unprecedented supply chain risks emerged that needed to be managed More and more adoption of technologies such as Al in manging risks with focus on real-time or near real-time risk assessment, predictive analysis and decision making. Organisations are shifting to embedding risk-awere culture among employees and encouraging proactive risk management behaviours
Risk Management has come a long way from its early focus on insurance and Financial risks to a more holistic and integrated approach that addresses a wide variety of organisation risks. I will continue to evolve to meet the evolving and emerging challenges.
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