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©2023 Redhand Advisors. All rights reserved.
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©2023 Redhand Advisors. All rights reserved.
Companies of all sizes are increasingly relying on
technology such as software as a service (SaaS)
application to improve their business processes.
In fact, 80% of companies already use at least one
SaaS solution, and it's predicted that, by 2025, 85%
of total company software use will be SaaS.
Risk management information systems (RMIS) are a
part of that growth, as more and more companies
turn to them to manage business risks across their
organizations than ever before. And it's not just
larger organizations that are utilizing a RMIS; many
smaller businesses engage with similar RiskTech
tools to manage risk.
Our latest RMIS Report Survey found that
organizations are relying on their RMIS more
than ever before; however, the survey also found
that businesses feel they are underutilizing their
RiskTech tools, with 43% of them noting they rely
too much on Excel.
Over 50% of respondents reported that their
organization's use of risk technology is only
moderately effective or worse, and less than half
said they utilize their RMIS well. The survey also
revealed that companies aren't using their RMIS to
its full capacity, because of issues such as cost, lack
of resources, and lack of training or knowledge of
the system.
Unfortunately, the current risk environment is
high for many businesses, thanks to cybersecurity
concerns, the difficulty in hiring and retaining
talent, the hardening insurance market, the threat
of a recession and more. Despite these significant
headwinds, business leaders seem to be optimistic
about the future, with 83% of them focusing their
business strategy on growth.
This year's RMIS Report Survey illuminated several
trends and hot topics that will lead to this growth,
including the increased demand for data integration
and use of RiskTech by companies of all sizes.
The Increasing Demand for Data Analytics
Collecting data is an important step in
understanding your business risk, but that data
is worthless if you can't analyze its meaning. The
RMIS Report Survey asked companies how effective
their use of data and analytics was to manage risk;
less than half (46%) of respondents noted they're
"very" or "extremely" effective with analytics. That
percentage is quite low when compared to the
responses to how effective companies feel with
other system capabilities.
There are many factors that contribute to this gap
in effectiveness, including a lack of data quality,
governance, and internal analytic expertise.
Additionally, many organizations struggle to
effectively integrate data analytics into their
business processes, leading to suboptimal
outcomes.
On top of these internal challenges, there is also
a significant gap in client satisfaction with vendor
analytics capabilities. Our survey reports that
analytics capabilities from RMIS vendors are not
viewed favorably compared to other capabilities.
Many risk managers report feeling frustrated by the
limited capabilities and insights provided by their
vendors, and some are actively seeking out new
partners who can offer more advanced analytics
solutions.
To address these challenges, organizations need
to invest in improving their data quality and
governance, engaging skilled data analysts, and
integrating data analytics into their business
processes. And they will. Our survey found that
many companies are looking to adopt big data
analytics, artificial intelligence, and machine
learning within the next three years, as shown by
the chart on the next page.
1.7%
8.4%
41.1%
39.2%
9.6%
How effective is your organization's risk
technology?
Not effective at all Slig htly effective Moderately effective
Very effective Extremely effective
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DISTRIBUTION
