Operational Risk in the global economy is migrating to places that 10 years ago would not have been easily forecasted.
New countries, financial institutions and software technologies have changed the playing field for our risk management executives.
Why is this happening?
One example is the movement of employment to more emerging markets where corporate tax rates are lower and the supply of talented workers with specific skill sets is prevalent.
The simple movement of people and systems to those new countries creates new found risks that may not have been as pervasive in the past for the institution.
Another example is the evolution of new computing platform paradigms such as the emergence of "The Cloud" or “Infrastructure-as-a-Service".
This outsourced IT model not only provides economy of scale in terms of just in time computing power but also the more economical licensing models.
Operational Risk within the confines of the global workplace will continue to follow what countries are attractive and where these people and the systems are now operating from.
Along with this migration of responsibilities of vital corporate processes to other cultures and countries comes the risks associated with potential lack of safeguards, both legally and to the physical protection of key corporate assets.
In the United States, our “True International Economy" explains why there are tens of millions of employees now working for US-based corporations outside the country.
Once you have accepted this fact, your personal risk mindset may also change.
How many U.S. organizations have now moved their Corporate Headquarters to Dublin?
How many American companies now have personnel in foreign countries reviewing online “Social Media” content with the assistance of AI?
"You may have heard the phrase "Follow The Money" in several contexts in the past."
Whether it was Watergate investigations in the 70's or now the 2020’s and the new “Global War in Space”.
The real-time tracking of where money flows, can be a core indicator of where Operational Risk managers need to keep their radar focused and on high alert.
Operational Risk Management (ORM) in the next decade will take on a whole new international meaning and significance than it currently does today.
The risks associated with people, processes, systems and external events will become even more exponential…