With 2024 just around the corner, risk and security professionals are poised for another year of transformation in the GRC landscape. According to Gartner, global end-user spending on risk management and cyber security will reach $215 billion in 2024, reflecting a 14.3% surge from the previous year. And, as the regulatory landscape becomes more intricate, GRC programs will progress to becoming a top priority.
In this article, we will look at some key trends powering what’s next for GRC in 2024.
AI for GRC
While Generative AI’s mass adoption was the highlight of 2023, AI for GRC will emerge as a promising area in the coming year. The diverse applications include AI-powered threat intelligence, automated risk assessment planning, continuous regulation monitoring, and fraud detection.
Another impactful use of AI for GRC is rationalizing controls and automating control tests, identifying missing controls and enhancing control test planning efficiency. This not only reduces costs but also enhances the risk program’s effectiveness.
We will also see a shift towards a more dynamic and semi-automated ‘Dynamic Strategic Decision making’ with risk modelling at the center of business strategy.
Connected GRC strategy to thrive on risk
In an increasingly interconnected world, organizational risks are expanding with heightened volatility. Organizations must move from traditional, isolated approaches to a connected GRC strategy to navigate this complex web effectively. Unfortunately, as per PwC’s Global Crisis and Resilience Survey, only 1 in 5 organizations has fully integrated functions.
A connected GRC strategy is more crucial than ever in 2024 to foster seamless visibility, communication, and information sharing among different functions geographies and business lines. A GRC platform that unifies risk, compliance, audit, cyber, and ESG functions, offering comprehensive risk management becomes even more critical
Continuous control monitoring to turn risk into rewards
As per a Forrester study of 500 risk leaders, 70% believed that access to real-time, optimized alerts could have significantly mitigated the impact of serious risk events they faced in the last year. In general, the evolving complexity of organizations renders traditional control testing and monitoring insufficient.
In 2024, obtaining a real-time view of risks is necessary, with automated risk and control monitoring as a proactive solution. Continuous control monitoring ensures that security controls are rigorously tested and monitored, analyzing data from diverse sources to detect issues, risks, and potential threats autonomously.
Proactive compliance approach as a business imperative
As per the True Cost of Compliance report, financial crime compliance expenses have surged by 18.8% since 2020, with an expected 8% increase in the next three years.
Given the escalating pace of regulatory change and compliance costs, organizations must prioritize transforming compliance functions from reactive to proactive, from periodic to continuous. Establishing compliance agility involves adopting a uniform view of compliance through a centralized platform with regulatory change-tracking technologies. It should integrate compliance management systems with enterprise systems, leveraging AI for automated recommendations. This proactive approach becomes essential in managing compliance complexities.
Cyber risk optimization as a priority
The global cost of cybercrime is expected to soar to $9.5 trillion in 2024. Industries with critical functions like energy, healthcare, and banking face heightened susceptibility to cyber threats and data breaches. To transcend reactive defense, enterprises are gearing up for 2024 by integrating automation, analytics, AI, and continuous control monitoring into their cyber risk management strategies.
Key initiatives involve harmonizing controls across diverse standards, implementing continuous control monitoring for enhanced compliance and security, and quantifying cyber risk exposure.
Risk oversight for third parties as a critical mandate
In 2024, the emphasis on third-party risk management intensifies as the extended enterprise becomes more intricate and multi-tiered. Organizations require a unified source of risk truth offering visibility into third-party, as well as fourth and fifth-party risks.
Continuous third-party risk identification and monitoring are essential due to these risks’ intricate, multidimensional, and ever-evolving nature. Moreover, fostering improved coordination across sourcing, procurement, risk management, legal, and business continuity management functions is crucial to fortifying a more resilient third-party ecosystem.
Resilience as the cornerstone to stay ahead of risks
As we navigate a landscape of interconnected risks, organizations must fortify their resilience and business continuity programs in the coming year. This involves predicting, anticipating, and proactively managing risks, rebounding swiftly when impacted.
Establishing risk appetite and tolerance levels is central to robust risk management and resilience. Both clearly defined will play a pivotal role in 2024 in business strategy by setting risk thresholds and necessary capital allocation for recovery.
Quantifying non-financial risks to gain strategic advantage
Non-financial risks (NFRs), including misconduct, compliance lapses, cybersecurity breaches, and operational disruptions, are increasingly recognized as potent threats. These lead to direct financial losses and inflict reputational harm, system downtime and regulatory fines.
To enhance NFR risk comprehension, organizations need to turn more to risk quantification, specifically by calculating the expected monetary value of a risk. Employing quantitative methods such as statistical analysis, econometric models, back-testing, Monte Carlo simulations, and stress-testing will offer a robust framework for risk modelling.
Simplifying GRC with easy-to-use integrated platforms
Today, modern cloud platforms are simple and easy to navigate. The intuitive and user-friendly interfaces provide GRC teams with the required elasticity and scalability. Modern cloud architecture allows platforms to unify risk and compliance practices into a single source of truth. Tracking and monitoring risk assessments is more accessible on a single platform. GRC teams can work faster on meeting regulatory requirements and developing risk mitigation strategies. It can also speed up data-driven decision-making and build stakeholder trust. Low code/no code platforms enable GRC teams with little or no coding knowledge to change and update processes. There is no need to rewrite code to add fields, reports, tables, and columns, enabling a quicker adaptation change rate.
Low code/no code platforms make it incredibly simple to use, increase agility, maximize productivity, and foster innovation by providing a close fit to business requirements. Integrating APIs into cloud platforms simplifies integration with external systems, allowing for secure and authenticated data exchange. Teams can streamline data collection, standardize processes, and automate routine tasks.
Co-Founder and Co-CEO
MetricStream
Empowering frontline in risk management
The traditional three lines of defense (3LOD) model has long been a cornerstone of risk management. However, the spotlight has shifted to the first line of defense or the frontline. In 2024, organizations will need to increasingly delegate more risk management responsibilities to the frontline, accompanied by comprehensive training and tools.
Advanced GRC technologies enhance frontline engagement by simplifying risk assessment and reporting. Technologies like conversational interfaces, AI/ML, chatbots, and intuitive web forms facilitate easy risk capture, even in the field or on the go.
In the evolving landscape of GRC, 2024 will see a significant shift towards adopting cloud-connected platforms. This move will not only enhance accessibility but also facilitate seamless collaboration and real-time data insights.
