Top 6 Operational Risks for 2022
January 12, 2022
The global pandemic has forced changes in working conditions and resulted in a major shift towards remote working. The continuing advancement of technology has allowed the world to be more digitally focused and with this, there has been a noticeable increase in the number of cybercrimes in 2021.
Ransomware attacks are becoming a major threat for organisations, and we are forecast to see more attacks of this nature in 2022. Companies need to invest and really think about the controls they are putting in place to mitigate against Cybercrimes.
Several industries, such as healthcare and financial services, are adopting cloud technologies to put a major focus on investing in cybersecurity in order to mitigate potential cyberattacks.
2. Change in Organisational Structure
Organisational structures have changed dramatically over the past 3 years, which has highlighted an operational risk as we continue through unprecedented times. Change is constantly happening in every industry, but a secure strategy needs to be put in place in order to survive change.
As organisational structures change, processes need to change with them. Organisations in all sectors need to ensure that they have a suite of strategic controls in place to manage this change.
3. Climate Change
In order for any business to survive and thrive in the market, they must adopt sustainable actions. If a business chooses to ignore the topic of sustainability and climate change, they could suffer reputational damage that will impact their bottom line.
Government regulations continue to focus on Climate Change actions. Innovation amongst business leaders, especially the financial sector, must continue and compliance with the latest regulations will be necessary to become market leaders.
As the financial sector begins to prepare for the year ahead, Environmental, Social and Governance (ESG) controls are becoming an essential part of the business plan in order to survive in the market. The likes of green loans and mortgages are examples of products that will be in the limelight for the financial sector, along with carbon - tracking features will also be introduced in order to abide by customer expectations.
The ‘S’ - Social aspect of ESG has been brought to light in the financial sector, and we expect to see more actions implemented as we enter 2022. Customer’s buying behaviour is constantly changing and with ethical actions at the forefront of their mind, customers now are willing to pay more for products that are coming from a company with an ethical and sustainability structure in place.
5. Employee Wellbeing
It is hoped that 2022 will see an easing of the worldwide pandemic. Recent years have taken their toll on the workforce and there are major worries around employee’s mental health and wellbeing.
In fact, it has been highlighted as one of the top operational risks in the financial sector. As the world has adapted to new working conditions, it is harder than expected to revert to the workplace environment.
With this in mind, organisations need to think about putting in place the relevant controls to ensure that their workforce is being looked after as they return to the office.
6. Talent Management
Hiring and maintaining valuable employees is forecast to be a major challenge for organisations in 2022. The new approach to working conditions and the introduction of working from home has opened up many opportunities to workers but has posed a threat to many organisations as employees consider change.
In order to combat loss of highly skilled and valuable employees, industries are looking at better communication strategies and frequent check-ins between employees and management. Employee reward and recognition programmes and other HR controls are being developed further to mitigate this threat.
One of the most critical aspects of risk management is identification of threats. If it is not identified, no action will be taken to mitigate the risk. In order to reduce operational risk within the organisation, it is important that risk management teams are satisfied with the controls they have in place and the processes they have for testing those controls going forward. Employee training should be considered in order to reduce the risk of being targeted and also make employees aware of the potential risks.