Klaus Schwab, author of "The Fourth Industrial Revolution" described it as "a fusion of
technologies that is blurring the lines between the physical, digital, and biological spheres.
There are three reasons why today's transformations represent not merely a prolongation of
the Third Industrial Revolution but rather the arrival of a Fourth and distinct one: velocity,
scope, and systems impact. The speed of current breakthroughs has no historical precedent.
When compared with previous industrial revolutions, the Fourth is evolving at an exponential
rather than a linear pace. Moreover, it is disrupting almost every industry in every country. And
the breadth and depth of these changes herald the transformation of entire systems of
production, management, and governance."
"The possibilities of billions of people connected by mobile devices, with unprecedented
processing power, storage capacity, and access to knowledge, are unlimited," he added. "And
these possibilities will be multiplied by emerging technology breakthroughs in fields such as
artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing,
nanotechnology, biotechnology, materials science, energy storage, and quantum computing."
According to research firm IDC, global data is expected to grow from 33 zettabytes (ZB) in
2018 to 175 ZB by 2025. It is this massive amount of data that is driving these new
technologies. Let's look at some of these new innovations and how they will positively impact
risk management.
Data Analytics
Data and insight go hand in hand. It is one of the
reasons data analytics has been an incredibly
useful tool of risk managers.
Data analytics is the process of discovering and
communicating the meaningful patterns that can
be found in large amounts of data. Analytics turns
raw historical data into insight for making better
decisions.
Data analytics utilizes historical data from
multiple data sources, including emails, files,
instant messages, databases, and social media to
draw outcomes about the information the resides
in today's companies. This historical data is then
used to build a mathematical model that
captures important trends.
THE NEW RISK MANAGEMENT | 8
