Risk and reward: Report reveals what risks businesses should look out for in 2022
A new report by RiskBusiness Services Limited has revealed various challenges and opportunities that businesses could face in 2022 while also exploring new horizons for financial services firms.
The 12-page report titled “Emerging risks in 2022 - The challenges and opportunities ahead” details a culmination of learned and predicted experiences from a variety of companies and highlights what kinds of situations can be focused on in the future to help businesses going forward.
One of the most obvious risks cited in the report was the widely termed “Great Resignation”, in which multiple studies predict that as a result of the COVID-19 pandemic, many employees will resign in February/March 2022. According to a recruiter, the predicted Great Pay Divide will result in The Great Resignation peaking in February or March 2022.
Post-January appraisals that occur mainly amongst professionals with in-demand skill sets in legal, accounting and finance are achieving 20-30% pay rises when moving roles, which adds difficulty to hiring and maintaining staff.
Additionally, the report found that in the technology field, the pay rises can reach up to 50% for
individuals with software development or cybersecurity experience.
This inability to hire and maintain the right talent is said to possibly lead to gaps or errors in processes, compliance failures, or poorly managed risks. However, companies that are able to attract and retain suitable talent will find themselves having a competitive advantage.
Digital finance is also another hot topic when it comes to risk management, with open banking and digital currency paving the way for new enterprise and growth opportunities but also danger.
The research shows in June 2021, trading volumes in digital asset derivatives across all trading venues amounted to GBP $3.2 trillion, surpassing those of spot transactions and achieving a 53.8% market share of the total market in digital assets. According to a recent analysis, this represents an almost eightfold increase in global trading volumes in digital asset derivatives since June 2019.
With constant changes to financial markets and regulations, this rapid growth can bring both growth and risk, with experts believing that firms need to seriously think about how to anticipate and manage potential risks related to digital assets.
Acquisition value changes, vulnerable customers and the future of blockchain are also mentioned as potential risks, as many of these new developments have come as a direct result of facing the challenges of the pandemic.
The report summarises that the best way to tackle the risks and challenges in a general sense is to collaborate with other firms through industry associations, groups sponsored by regulators and other forums to share information about risks and potential management of them. This sense of community will create a culture of understanding that will enhance and prepare companies for the future.