In October 2024, the World Economic Forum (WEF) published its “Chief Risk Officers Outlook,” which provides a deep insight into the global risks that companies and governments will face in the coming year. This report, based on surveys of leading risk managers around the world, clearly shows that the global environment continues to be characterized by uncertainty and volatility. Although the general situation has improved slightly compared to last year, the future remains fraught with significant risks for many organizations. We would like to summarize the key points and provide a brief overview.
Geopolitical and macroeconomic challenges
The main risks that Chief Risk Officers (CROs) see are primarily geopolitical and macroeconomic uncertainties. A full 96% of respondents expect continued instability in geopolitical and geoeconomic relations between major economies. This figure has increased by a remarkable 23 percentage points since 2023 and underscores concerns about increasing tensions in global politics. The Middle East conflict in particular is contributing to this uncertainty, according to 84% of CROs, followed by Europe and the USA with 40% each.
On an economic level, the signs are also pointing to a storm: 76% of CROs consider macroeconomic indicators such as inflation, growth and liquidity to be the greatest external risk to their organizations. Despite some progress in combating inflation, the economic situation remains tense, and the upcoming US elections on November 5th are adding further uncertainty. This political event could have a direct impact on financial markets and investor and consumer confidence, which in turn increases the risk of a recession.
Technological developments and cybercrime
Interestingly, the assessment of risks related to technological developments has calmed down somewhat compared to 2023. While last year 38% of respondents expected instability in this area, this figure is now 24%. Nevertheless, cybercrime remains a serious threat, which 71% of CROs consider to be potentially serious for their organizations. This represents a significant increase compared to the previous year, underscoring growing concerns about the increasing number and severity of cyberattacks. The use of artificial intelligence (AI) by criminals in particular poses new challenges that are forcing organizations to tighten their security measures.
Regulatory changes
Another major risk facing organizations is regulatory changes. 67% of CROs surveyed see significant challenges in this area, particularly with regard to new regulations on data protection, artificial intelligence and sustainability. The new EU AI Act, which is already causing discussions in Europe, could lead to increased costs and administrative burdens in the short term, potentially putting European companies at a disadvantage in global competition.
The role of risk management in companies
Despite the multitude of risks, CROs emphasize the central role of effective risk management. 95% of respondents believe that well-integrated risk management offers a competitive advantage. At the same time, however, it is clear that many companies still have room for improvement when it comes to understanding risks as a strategic opportunity and incorporating them into their innovation and growth strategies. Companies often focus on short-term innovations instead of pursuing longer-term growth prospects.
Conclusion: caution and opportunity at the same time
The “Chief Risk Officers Outlook 2024” makes it clear that the coming year will be characterized by an uncertain and complex risk landscape. Organizations must prepare for geopolitical tensions, economic uncertainties and regulatory challenges. At the same time, technological innovations and effective risk management offer the opportunity to assert themselves in a volatile environment and secure competitive advantages.
So while the risks are clearly there, it is up to companies to turn these challenges into opportunities through strategic foresight and smart integration of the risk function.
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This blog article summarizes the key findings from the WEF 2024 report. Would you like more details? Read the full report from the World Economic Forum for deeper insights into the risks and opportunities ahead for businesses and governments.