Risk digitalization involves leveraging digital technologies to transform risk management practices within an organization. This includes automating processes, enhancing data analysis, and improving decision-making related to risk. 

Key aspects of risk digitalization include: 

  • Data analytics: Utilizing advanced analytics and machine learning to identify, assess, and monitor risks more effectively. This can involve analyzing large datasets to detect patterns, predict future risks, and optimize risk responses. 
  • Automation: Automating manual risk management tasks, such as data collection, reporting, and compliance monitoring, to improve efficiency and reduce costs. (Digital Risk: Transforming Risk Management for the 2020s, 2017) 
  • Real-time monitoring: Implementing digital tools and dashboards to monitor risks in real-time, providing timely insights and enabling proactive risk mitigation.  
  • Improved decision-making: Leveraging data-driven insights and predictive models to support more informed and effective risk management decisions.  
  • Enhanced collaboration: Facilitating better communication and collaboration among risk management teams and stakeholders through digital platforms and tools. (Schlüter & Hetterscheid, 2017) 

Digitalization can significantly improve the efficiency and effectiveness of risk management functions, enabling organizations to better identify, assess, and mitigate risks in a rapidly changing environment. (Mugge et al., 2020) It also allows for more proactive risk management, moving from reactive responses to anticipating and preventing potential threats. (Schreiner, 2021) However, it’s important to note that digital transformation in risk management also introduces new challenges, such as the need for robust cybersecurity measures and the management of data privacy risks.  

 

References 

Ganguly, S., Harreis, H., Margolis, B., & Rowshankish, K. (2017). Digital risk: Transforming risk management for the 2020 s. McKinsey & Company. 

Schlüter, F., & Hetterscheid, E. (2017, June). A simulation based evaluation approach for supply chain risk management digitalization scenarios. In 2017 International Conference on Industrial Engineering, Management Science and Application (ICIMSA) (pp. 1-5). IEEE. 

Mugge, P., Abbu, H., Michaelis, T. L., Kwiatkowski, A., & Gudergan, G. (2020). Patterns of digitization: A practical guide to digital transformation. Research-Technology Management, 63(2), 27-35. 

Schreiner, H. (2021, February). Totally Integrated Automation and Variability–The Siemens Way towards a Digital Enterprise. In Proceedings of the 15th International Working Conference on Variability Modelling of Software-Intensive Systems (pp. 1-1).