PwC’s Global Risk Survey 2023—Irish edition

From threat to opportunity

Global Risk Survey
  • Report
  • January 17, 2024

How a tech tipping point is fuelling reinvention, resilience, and growth

If we don’t take risks, we don’t progress. Taking risks intelligently is the only way Irish and global organisations can reinvent and transform to survive, create value and prosper in this time of uncertainty while building resilience to protect value in the face of complex, ever-changing risks.

PwC’s Global Risk Survey 2023 reveals how leading Irish and global organisations are changing the way they see risk by embracing the transformative power of technology and data in pursuit of opportunity and value creation. In our Irish edition, we outline the key themes identified by Irish respondents and explain how they compare to their global peers.

The survey outlines the views of 3,910 global business and risk leaders, including 60 Irish respondents, from the boardroom and C-suite, across technology, operations and finance, risk and audit. The findings highlight how technology is increasingly important in helping organisations protect value by mitigating and managing downside risk more effectively.

Like global respondents, the transition to new energy sources and changes in customer demands and preferences are seen as the biggest opportunities among Irish external disruptors, with both sources cited by 45% of Irish respondents (globally 54% and 47% respectively). By contrast, supply chain disruption is the main external factor seen as more of a risk than opportunity, cited by 40% of Irish respondents (42% globally).

Industry sector also impacts whether organisations sit at the value protection or value creation end of the risk appetite scale. Those in faster-moving sectors like retail and technology are more likely to embrace risk and seek opportunity. Meanwhile, those in regulatory-driven sectors are more likely to prioritise compliance and focus on risk avoidance. Different organisational functions also have different perspectives on risk, with risk and finance roles more likely than others to say their organisation is focused on risk avoidance over a high-risk appetite.

55%

of Irish organisations seek to uncover opportunities within risks.

50%

of Irish organisations over the next 1-3 years plan to invest in risk management solutions together with upskilling staff on technology and data capabilities.

80%

have yet to fully integrate technology and data for risk management.

Top-performing organisations forge ahead in pursuit of opportunity

Our survey reveals a top performing 5% of organisations both globally and in Ireland across all industry sectors—identified in the research as ‘risk pioneers’—who are forging ahead in the pursuit of opportunity. Underpinned by strategic enterprise-wide resilience and guided by a human-led, tech-powered approach, these pioneers are significantly more likely than other organisations to be upskilling internal teams and making greater use of advanced analytics, predictive modelling and cybersecurity tools to navigate risk. They are also more likely to see emerging technologies such as generative artificial intelligence (GenAI) as an opportunity rather than a risk.

As a result, this leading group is better aligning the navigation of risk with business strategy to achieve a greater range of outcomes and value—from more robust regulatory compliance and streamlined reporting to enhanced customer trust and identifying new commercial opportunities.

Five key findings

Our risk survey highlights five compelling findings for Irish leaders. Each is explored further in this report, focusing on why they matter to Irish organisations and their stakeholders, the value they create, and practical ways to use technology and data in new ways to navigate risk.

1. How technology is reshaping perceptions of risk

Technology plays an increasingly significant role in shaping Irish organisations’ exposure to risk, their appetite for taking risks in pursuit of new opportunities, and the tools they use to mitigate risk and build resilience.

2. The need for a human-led, tech-powered approach to risk

We have analysed our respondents’ risk appetite and preference for value creation versus value protection and plotted this against the maturity of an organisation’s human-led, tech-powered approach—revealing four illustrative risk archetypes and a top-performing group of risk pioneers.

3. How Risk Pioneers are leading the way

Risk pioneers are leading the way in reframing risk as a value-creation opportunity for their organisations. This top-performing 5% of both global and Irish organisations, built on enterprise-wide resilience and driven by a balanced human-led, tech-powered approach to risk, are already achieving more successful outcomes than others.

4. Closing the gap—Five ways you can be a risk pioneer

Five key actions for organisations to ensure they are resilient and equipped to survive, create value and prosper amid uncertainty and complex, ever-changing risk.

5. Are you ready to change the way you see risk? The key questions leaders must answer first

The journey to taking risks more intelligently—powered by technology and through the lens of reinvention, opportunity and growth—requires leaders to start with these four key questions.

How technology is reshaping perceptions of risk

Technology plays an increasingly significant role in shaping Irish organisations’ exposure to risk, their appetite for taking risks in pursuit of new opportunities, and the tools they use to mitigate risk and build resilience.

Cyber (the top technology-related threat by both Irish and global respondents) is the highest-ranking risk Irish respondents feel most exposed to, while other digital and technology risks are almost on par with macroeconomic volatility.

But the survey shows such technology-related risks, from cyber attacks to costly and potentially brand-damaging mistakes in deploying technology, are not putting Irish or global organisations off investing in technology. The appetite for innovation and new technology is encouraging organisations onto the front foot. They are proactively assessing and mitigating these risks to transform and to manage their costs, support growth and ultimately build their resilience.

Interestingly, Irish respondents are lagging global counterparts in preparation for technology investment. 45% of Irish organisations cited that preparing for technology investments, from cloud to emerging technologies such as GenAI, is a key motivating factor to review their risk landscape, compared to 57% of global respondents.

When it comes to GenAI It is worth noting that Irish organisations are on a journey of discovery. Global organisations are far more bullish and confident with GenAI deployment, evident by 60% of global respondents viewing GenAI as a key opportunity (compared with only 28% of Irish respondents, with a further 47% viewing GenAI equally as a risk and an opportunity).  The global enthusiasm for GenAI echoes PwC’s Global Digital Trust Insights Survey, which found that 77% of global respondents believe GenAI will help their organisation develop new lines of business over the next three years. PwC’s 2023 Global Workforce Hopes and Fears Survey of more than 50,000 workers also revealed that employees see more positive than negative impacts from AI on their roles, despite headlines about AI-fuelled job losses

The need for a human-led, tech-powered approach to risk

We have analysed risk appetite and preference for value creation versus value protection among our global respondents and plotted this against the maturity of an organisation’s human-led, tech-powered approach. This reveals four illustrative risk archetypes. When we looked at those organisations achieving the greatest range of outcomes, we identified a small group of top-performing risk pioneers leading the way.

The risk archetypes

Click each archetype below to learn more.

 

Open innovators quadrant

Innovator

28%Spread across most industries and culturally predisposed to the pursuit of value creation over value protection but rely primarily on their human insights and culture of innovation to achieve it. More than three-quarters (77%) have a high appetite for risk and 88% seek to uncover opportunity in risk over regulatory adherence. They are more likely to have a proactive approach to taking risk and building resilience. However, they are also more likely to be using basic technology and data tools for managing risk, which lack comprehensive integration. And their enterprise tech strategy is less likely to include investment in tech specifically to build resilience and manage risk.

Read more Close this quadrant Back to Risk Archetypes
Open disruptors quadrant

Disruptor

20%Focused more on value creation than value protection, are more advanced in the use of technology to achieve it, and are more likely to have fully integrated their use of technology and data in risk management and be using advanced and predictive risk management capabilities to identify and evaluate potential risks. This archetype is spread across most industries, apart from a significantly lower representation of organisations from government and public services. More than three-quarters have a high appetite for risk and 89% seek to uncover opportunity in risk over regulatory adherence. They have a proactive approach to building resilience to unexpected disruptive events.

Read more Close this quadrant Back to Risk Archetypes
Open pragmatists quadrant

Pragmatist

27%Culturally focused more on value protection and less advanced in their strategic use of technology. Government and public services organisations are more likely to be present in this archetype. Three quarters (76%) focus on risk avoidance over opportunity and 71% prioritise regulatory adherence when managing risk. This archetype is more likely to be using basic technology and data tools for navigating risk, lacking comprehensive integration. And they are less likely to be using tools such as advanced analytics or predictive modelling, real-time monitoring, data visualisation and cloud to identify and evaluate potential risks.

Read more Close this quadrant Back to Risk Archetypes
Open defender quadrant

Defender

20%Advanced in their use of technology and are more likely to have fully integrated their use of technology and data in risk management with regular updates and improvements—they are using it primarily for value protection rather than a strategic pursuit of value creation. Spread across all industries, almost two-thirds prioritise regulatory adherence over opportunity when managing risk and they are more likely to have low risk strategies.

Read more Close this quadrant Back to Risk Archetypes
Human-led
Tech-powered
Value Creation
Value Protection
Human-led
Tech-powered

PwC’s global risk archetype quadrant is an illustrative starting point to help benchmark your organisation’s approach to risk

It should not be assumed that the more reactive and protection-focused nature of some of the archetypes within this quadrant signals a lack of ambition or intent to shift towards value creation. In turbulent economic conditions and given that disruptions have affected some industries more than others, those organisations may be constrained in their ability to invest in the talent and technology needed. Or, they may feel exposed to risks so significantly that value protection is currently seen as the best and only outcome.

How risk pioneers are leading the way

Risk pioneers are at the forefront in reframing risk as a value-creation opportunity for their organisations. This top-performing 5% of global and Irish organisations, built on enterprise-wide resilience and driven by a balanced human-led, tech-powered approach to risk, are already achieving more successful outcomes than others.

As the chart below shows, risk pioneers consistently outperform other organisations through their approach to risk, particularly in value creation outcomes such as identifying new commercial opportunities and improving financial performance.

 

The gap between risk pioneers and overall global survey respondents for outcomes achieved to improve their approach to navigating risk
  • Total
  • Risk Pioneers
  • Greatest performance premium
    Q. Which, if any, of the following has your organisation achieved in the last 12 months to improve its approach to risk?
    Base: All respondents=3910 Source: PwC's Global Risk Survey 2023
    Status Risk pioneers All
    Enhanced customer trust and confidence 89% 40%
    Identification of new commercial opportunities 84% 32%
    Improved financial performance due to effective risk mitigation 84% 32%
    More robust compliance with regulatory standards 81% 40%
    Better alignment of risk management with business strategy 80% 31%
    Increased accuracy in risk forecasting 79% 29%
    Building competitive advantage 79% 31%
    Expansion into new markets 78% 28%
    Enhanced response time to emerging risks 77% 28%
    Streamlined risk reporting and communication 76% 32%
    Greater integration of risk management across business functions 76% 30%
    Improved identification and tracking of potential risks 75% 31%
    Improved resilience to external shocks or crises 75% 28%
    The key characteristics of risk pioneers

    The survey shows a fairly even spread of risk pioneers across most industries. Almost three-quarters (73%) of global risk pioneers have an enterprise-wide technology strategy and roadmap, which includes investment in technology to drive resilience and/or manage risk—compared to 53% of overall survey respondents. Risk pioneers typically have the following characteristics:

    Outcomes achieved 
    • Very confident balancing growth with managing risk.
    • View GenAI as a key opportunity rather than a risk.
    • More likely to proactively take risks to create opportunities versus prioritising safe or low-risk strategies.
    • Significantly more likely to prioritise building resilience to unexpected disruptive events versus prioritising stability and continuity when trigger events occur.
    • More likely to view their own risk appetite (30%), their CEO’s (31%) and their board’s (26%) as eager/hungry, indicating closer leadership alignment on taking risk.
    How they achieved them
    • More likely to combine advanced and predictive risk management capabilities with cutting-edge technology and data to navigate risk.
    • Less likely to say legacy technologies have impacted their organisation’s ability to manage and respond to risk.
    • More likely to have improved financial performance due to effective risk mitigation.
    • More likely to have achieved more robust compliance with regulatory standards.
    • Significantly more likely for the risk function to be already demonstrating strategic behaviours such as challenging senior management on strategy and risk appetite, guiding the business through complex change such as mergers and acquisitions (M&A), and bringing risk insights to the board for better oversight.

    These leading risk pioneer behaviours and outcomes reveal a clear gap that organisations need to address if they want to use technology more effectively and create opportunity and value out of risk. Around two-fifths of all Irish organisations have improved their approach to managing risk to enhance customer trust and improve compliance with regulation. However, fewer than one-third of organisations have achieved successful outcomes across other key areas, highlighting the opportunity to achieve better results from their risk strategy and to provide strategic value.

    Closing the gap—five ways you can be a risk pioneer

    1. Match tech ambition with action

    Most global and Irish organisations have a clear ambition to take a more tech-powered approach to risk, as evidenced by their intention to invest in AI, machine learning, automation, cybersecurity and cloud. However, many Irish respondents are still at relatively early stages of maturity in their use of technology and data for managing risk. See global and irish maturity chart comparison below:

     

    Legacy technology investments—often becoming more complex through years of mergers, acquisitions, restructuring and consolidation—are also impacting organisations’ ability to manage and navigate risk.

    The biggest legacy tech challenges for risk

     

    38%

    Increased operational risk failure due to potential system failure or lack of vendor support.

    37%

    Increase in security vulnerabilities.

    35%

    Lack of flexibility in adapting to change.

    33%

    Poor data integration and management limits a holistic view of risks.

    There also appears to be differences between those in technology and operations and those in risk and audit when it comes to the perception of how mature their organisation’s use of technology and data to navigate risk is. For example, 68% of technology respondents and 63% of operations respondents say their organisation uses advanced analytics or predictive modelling to identify and evaluate potential risks to a large or very large extent. This compares with just 49% of risk executives and 15% of audit respondents who agree with that statement.

    Despite these challenges, as the risk pioneers demonstrate, early advantage is still available to those bold enough to move quickly and embrace emerging technology at speed

    2. Put purpose at the heart of your risk strategy

    An approach to risk led by a clear and authentic purpose can help Irish organisations be more resilient and guide which risks to embrace or avoid. It ensures the whole organisation understands the direction and ambition for the future and helps build trust with stakeholders—from employees and customers to investors and regulators.

    Purpose provides a vital strategic lens on whether a risk is more of a threat or opportunity, particularly around issues such as climate change, sustainability, ethical supply chains and the responsible use of emerging tech, such as GenAI. Yet only around a quarter (23%) of Irish respondents say they strongly agree that their organisation uses purpose and vision for the future to make decisions about risk.

    This compares with 59% of risk pioneers who strongly agree their organisation uses purpose and future vision to guide risk decisions, and this can be seen in their approach to external disruption. For example, 44% of risk pioneers see supply chain disruption as mostly or fully an opportunity over risk, versus 29% of overall respondents. Furthermore, 63% see the transition to new energy sources as mostly or fully an opportunity versus 45% of the rest of the survey respondents. When it comes to a responsible approach to tech, almost three-quarters (74%) of risk pioneers have already implemented ethical frameworks for emerging tech versus 39% of Irish survey respondents overall.

    Working with your employees and wider stakeholders, such as investors, regulators and non-executive directors, to set a clear and authentic purpose builds the right risk mindset, which then feeds into the risk frameworks and metrics that will help build resilience and deliver sustainable outcomes.

    3. Fix the leadership disconnect

    Most Irish organisations (88%) are confident they can balance growth ambitions with managing risk effectively, but there are differences when we analyse responses across different job roles and functions.

    For example, from our global responses, half of CEO and board respondents are very confident about balancing growth and risk compared to just 34% of operations leaders and 30% of audit leaders. And just over one-fifth of risk executives say their own risk appetite matches that of their CEO and board.

    There is also a misalignment in the perception of the strategic value the risk function provides. CEOs are less likely than risk executive survey respondents to agree the risk function demonstrates behaviours such as bringing risk insights to the board for better oversight, guiding the business through complex change, and challenging senior management.

    For example, 60% of risk executives say they already provide insights on new and emerging risks to senior management versus 54% of respondents from the wider business—CEOs, the board, operations, tech and finance.

    This disconnect is also evident in PwC’s Global Internal Audit Study 2023, with business leaders stating they want more early and proactive strategic engagement with Internal Audit. Despite that expectation, only around one-fifth of executives ranked strategic thinking and the ability to challenge constructively as key strengths of Internal Audit. Almost half (49%) said Internal Audit does not have strong alignment with other lines on key risks and challenges.

    This leadership disconnect needs to be resolved if risk management is to amount to more than value protection and a reactive response to threats. Fostering greater collaboration between the risk function, leadership and the wider business and having more strategic conversations earlier in the process are key if organisations are to find opportunities where competitors may still see risk.

    4. Build a foundation of strategic resilience

    There is a link between resilience investments and achieving risk management outcomes, with better-performing organisations more likely to have invested across more resilience initiatives in the last 12 months.

    Although around half of Irish organisations have invested in specific resilience initiatives, these remain in isolated pockets, with just 7% investing across the board in more strategic and proactive enterprise-wide resilience.

    The top three resilience initiatives organisations plan to invest in over the next 12 months.

    35%

    Establishing a resilience team with members from functions like business continuity, cyber, crisis management and risk management.

    28%

    Expanding our network of key suppliers as part of our business continuity plans.

    25%

    Upgrading critical systems to be more resilient against cyber attacks.

    Our survey shows relatively strong investment in resilience initiatives such as investing in digital communication and remote sharing to enable remote working in a crisis, upgrading critical systems to be more resilient against cyber attacks and establishing protocols with major technology providers to coordinate incident responses. But there is room for improvement in initiatives such as establishing a cross-functional resilience team, expanding your network of key suppliers as part of business continuity plans and building back-up production facilities.

    5. Create a culture where diverse and bold thinkers can thrive

    Ambitions of making risk a strategic player that helps organisations take on risk with confidence and unlock new opportunities and sources of value must be matched with the development of skills and capabilities.

    Yet only 25% of Irish organisations (31% of global respondents) say they strongly agree that upskilling teams to be better prepared for potential risks or that providing employees with the right skills to better enable them to solve complex problems (17% of Irish respondents, 31% of global respondents) are a priority. That compares to 60% and 58% of risk pioneers, respectively, who strongly agree with those statements.

    Another key growth mindset behaviour in top-performing organisations is detoxifying failure through a ‘safe-to-fail’ culture, where employees feel they can experiment and adapt to different circumstances and events. Yet only a quarter of respondents said they strongly agree their organisation has a safe-to-fail culture, compared to half of the risk pioneers.

    Organisations will need to recognise that the whole organisation has a role in navigating risk, from increasing collaboration internally and externally across supply chains and ecosystems to challenging their risk appetite and collectively building resilience. This presents the opportunity for a new role for risk teams where there will be a more strategic use of their insights and experience.

    Are you ready to change the way you see risk? The key questions leaders must answer first

    The journey to taking risks more intelligently—powered by technology and through the lens of reinvention, opportunity and growth—requires Irish leaders to start with these four key questions:

    • Are you clear on how GenAI will disrupt your sector, and do you have a plan to ensure your organisation emerges as one of the winners?
    • Do you have sight of the threats on the horizon? Using this insight, do you have alignment between the risks you need to take to create business value and the practical measures you have in place to respond to shocks and surprises and mitigate risk?
    • Have you invested appropriately in building your organisation’s resilience to disruption, removing critical points of failure and developing your capabilities to respond swiftly to risk events as they occur?
    • Does technology underpin how you assess, manage and take risks, or are you still using manual approaches and spreadsheets?


    Organisations can no longer afford to rely on a reactive approach to risk that focuses primarily on avoidance. One in five of Irish CEOs respondents think their company will no longer be economically viable a decade from now if it continues on its current path. From climate and geopolitical risk to macroeconomic volatility and the disruptive power of technology, organisations must change and reframe the way they see risk to build resilience and unlock opportunity.

    We are here to help you 

    The ability to adapt and reinvent at pace amid this constant change and uncertainty is vital for survival and sustainable growth. Harnessing the power of technology and data in new ways and building more diverse, multi-disciplinary capabilities across the organisation will be critical to turning risk into an enabler of change and growth. We are ready to help you as you face the future. Contact us today.

     

    Risk Assurance

    Protect and strengthen your business

    Contact us

    Andy Banks

    Partner, PwC Ireland (Republic of)

    Ciarán Kelly

    Risk & Regulation Leader, PwC Ireland (Republic of)

    Keith Power

    Partner, PwC Ireland (Republic of)

    Tel: +353 86 8246993

    Shane Walker

    Director, PwC Ireland (Republic of)

    Follow PwC Ireland