Unearthing and solving the emerging risks of tomorrow…
Combining the right data, AI algorithms and APIs to shape ethical and reliable digital business models
According to the Operational RiskData Exchange Association (O.R.X.), the top three risks within the banking sector in 2020 were climate change, Artificial Intelligence, and operational risks. In 2021, these have extended to risks directly linked to an increasingly digitized world. According to global advisor, broker, and risk manager – Willis Towers Watson – the top three most dangerous risks faced by the insurance industry are cybercrime, disruptive technology, pricing linked to profitability. As we enter a new decade of change and transition to more sustainable business models, the disruptive technologies required to deliver digital operations will remain one of the most pressing emerging risks of this decade. To deliver digital products and services, you need technology. Disruptive technology leaders know the challenges they face. The question is how to solve them.
New risks are emerging every day…
Insurers and financial services companies are good at keeping abreast of emerging long-term risks. Major insurance players such as Allianz, AXA, Munich Re, and Zurich frequently cited climate change as their top emerging risk on their materiality assessment matrices, along with inclusive workplaces and digital transformation. Similarly, surveys of banking executives show an awareness of the need to mitigate climate change, focus on cybersecurity and data privacy, and the need to adapt to turbulent global macroeconomic trends constantly.
As the Covid-19 pandemic and the subsequent crisis have shown us, emerging risks can appear at any time, adding to the challenges disruptive technology leaders face. Cybercrime is on the rise, costing global firms more and more each year both in terms of insurance claims, reputational damage, and the expense of protecting themselves from attacks.
External market forces and competition from digital-first players remain a constant threat. For insurers, the inability to service underinsured segments, including the unbanked, gig economy workers, or small businesses results in emerging risks impacting future growth prospects. For financial services institutions including insurers, keeping up with the digital demands of consumers and the evolving operational models of commercial players are becoming greater priorities.
While Covid-19 has been a serious destabilizing factor, it also acted as a catalyst for digital transformation and mobile-first engagement. Thousands of startup, scaleup, and grownup ventures (many having raised multiple billions of funding in recent months) were able to adapt their value propositions in weeks to meet the needs of struggling customers. Clearly, where there is risk there is also opportunity.
The disruptive technology leader needs accurate data, AI algorithms and FutureTech
Although established market players recognize the need to evaluate future risks – known and unknown – too often they are forced to rely upon historical data. Insurance businesses and financial firms must improve their ability to assess current and future risk data on an individual and aggregated portfolio basis. Only then can they determine the impact of new scenarios and make accurate growth predictions.
This entails being able to access new data sets, advanced artificial intelligence algorithms, APIs to connect old and new, and extensive FutureTech, including innovative platforms and disruptive technologies to quickly adapt business model strategies and operations as needed.
The Emerging Risk Venture Labs
It is time to identify, plan and operationalize techniques and systems to address the large variety of emerging risks that are coming to life today – beyond cybercrime – as well as those likely to emerge in the future. These sets of Virtual Venture Labs from Alchemy Crew will assess those emerging risks that are going to affect your operations, with the highest immediate impact on your organization, and deliver profiles for those startup, scaleup, and grownup ventures that can yield the highest positive outcomes for your business.
We also leverage our extensive network of tech ventures, data, and Artificial Intelligence experts to evaluate the best-suited solutions for any complex environment.