A recent KPMG report suggests businesses should anticipate and prepare for ten key regulatory challenges in 2023, including:
Companies will need to evaluate and disclose their exposure to physical and transitional risks connected to climate change. In addition, they will need to disclose their commitment to lowering greenhouse gas emissions, as part of climate risk management. It is imperative for organizations to secure their systems and data from hacks and other security breaches. In addition, they will need to adhere to changing data protection rules and regulations in various jurisdictions.
Companies must prevent and detect money laundering, terrorist financing, fraud, corruption, and sanctions violations. They must also work with law enforcement and regulators to conduct investigations and implement corrective measures. To comply with consumer protection laws, companies must make sure that investors and consumers are treated fairly and provide honest and accurate information about their goods and services.
The ability of businesses to endure and recover from operational interruptions brought on by internal or external events, such as pandemics, natural disasters, cyberattacks, or supply chain breakdowns, is known as operational resilience.
It also offers a number of suggestions for improving ORM procedures and addressing these issues. These suggestions include adopting a proactive and forward-looking ORM strategy that considers changing regulatory requirements and expectations, as well as potential risks and possibilities. The use of new data sources and technology to improve the detection, evaluation, mitigation, and reporting of risks.
ORM approaches that take into account how operational risks affect stakeholders, society, and the environment should incorporate social values—enabling risk responsibility and escalation by fostering a culture of transparency, accountability, and integrity in ORM processes and developing a logical and consistent structure in cooperation with regulators and stakeholders that encourage oversight and innovation in the operational risk environment.
The research also shows how innovation helps improve ORM. It exhorts companies to adopt advanced technologies that improve risk intelligence and enable more informed and quick risk decisions. Examples include artificial intelligence, machine learning, blockchain, cloud computing, and the Internet of things.
