Cyber and digital risks cause concern, yet GenAI presents new opportunity

Cyber and digital tech risks have been identified as a significant concern for businesses and risk leaders in 2023. However, 60% also see Generative AI (GenAI) as a business opportunity, according to PwC's 2023 Global Risk Survey published today.

More than 3,900 business and risk leaders were surveyed, revealing that 39% of respondents feel seriously exposed to inflationary risks. Yet, it was cyber and digital technology risks that were identified as top worries, standing at 37% and 32% respectively.

The survey indicated that as businesses explore new technologies, such as GenAI, machine learning, automation, cybersecurity, and the cloud, there's a clear correlation with increased exposure to risk. Businesses are relying on these emerging technologies to inject value and transform operations, and as a result, are seeing a shift in their organisational exposure to potential threats.

Sam Samaratunga, Global and UK Head of Risk Services, PwC UK, said, "In a world that is persistently in a state of flux, it is clear that organisations need to transform, with new and emerging technologies playing a critical role in that transformation."

"So it is no surprise that cyber and digital risks are top-of-mind in 2023, with those leaders responsible for managing risk ranking cyber higher than inflation." Samaratunga noted that if organisations don't take risks, they won't progress, underscoring the relevance of risk for ongoing growth.

Preparation for technology investments, including GenAI and cloud technologies, is cited as the primary trigger for reviewing a company's risk landscape, with 57% of respondents noting this as a key reason for a review.

Interestingly, technological change continues to redefine the risk focus within businesses. In contrast, just 35% see changes in regulation or 28% see supply chain disruption as an opportunity.

'Risk Pioneers' - a group that constitutes 5% of the survey respondents - are leading in reframing risk as a value creation opportunity. These enterprises are 1.8 times more likely to see GenAI as a comprehensive opportunity than a risk, and 1.6 times more likely to proactively take a risk to create opportunities versus focusing on safe or low-risk strategies.

A challenge remains around the limited uptake of leading-edge tech and data management techniques in risk management. Just 10% of firms are employing advanced and predictive analytics, or using continuous adaptation and innovation techniques. A significant majority are at simpler stages of technology application, with only 24% using basic technology and data tools or having set procedures for risk management.

Simon Perry, Markets & Services Leader - Risk, PwC UK, concluded, "The age of the benign risk environment is over for the foreseeable future, amplified by the increasing pace and impact of technology change."

"These threats mean taking risk intelligently - powered by technology and framed by growth and opportunity - is now critical to adapting and reinventing yourself in this constantly changing world to both protect and create value."