July 16th, 2018

In Risk Management ‘Tried’ Technology Has Staying Power

Posted at 1:00 AM ET

Treasury and financial managers remain hesitant to try newer and more efficient risk management tools. A survey of finance professionals found that 97 percent use spreadsheets to manage risk while only 28 percent believe they are efficient risk management tools; this according to the 2018 Association for Financial Professionals (AFP) Risk Survey, which was produced in collaboration with Marsh & McLennan Companies Global Risk Center.

Spreadsheets’ widespread use has less to do with the application’s robust capabilities than its status as a tried and tested tool. Spreadsheets’ staying power is also a result of the challenges that companies face in finding the necessary skillsets to adopt newer technologies such as artificial intelligence.

However, new technologies are gaining traction. For instance, enterprise resource planning data engineering and predictive analytics are widely used. Two thirds of survey respondents believe that predictive analytics technology increases efficiency in risk management.

The survey found that among the new technologies being evaluated, distributed ledger/blockchain is perceived to have the lowest exposure to any new risks when compared to artificial intelligence and robotic process automation.

The new technologies may reduce or address some of the risks that may be present due to heavy reliance on spreadsheets, but could also introduce risks, such as cyber-risk.

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