Risk Management Trends for 2025: Missed Risk Connections, Context, and Shifting Dynamics Demand New Approaches

Current trends showcase the new risk management reality: Organizations must reimagine enterprise risk management (ERM) to better understand the connections, context, and shifting dynamics of their key risks. These trends embed challenges that are also opportunities to increase risk management value and impact. Fortunately, new technology innovations can help ERM teams respond to the missing risk connections and context and strategy shifts that are trending for 2025. 

Trend 1: Missed Connections Between Key Risks

Today’s risks are deeply interconnected, but organizations are too often failing to identify the connections between key risks. Seemingly small risks can create chain reactions with monumental consequences, as with the 2024 collapse of Baltimore’s Key Bridge: Lack of thorough ship maintenance might have led to a loose electrical cable, which may have caused the power failure that led to the ship’s collision with the bridge — which then created large-scale regional and national manufacturing and retail supply chain disruptions and economic costs.

Key risks’ interconnections often get buried below the surface of day-to-day operations. Only 37% of respondents in Gartner’s Leadership Vision for 2024 for heads of ERM are confident their risk assessments captured all key risk drivers. That’s why it’s essential to engage the first line in identifying and owning risks. ERM programs that engage first-line risk owners are more effective in surfacing the non-obvious connection points between risks and spotting warning signs earlier. 

How Tech Can Help

• Risk control self-assessments (RCSAs) boost first-line awareness and engagement, drive strategic alignment, and enable more effective collaboration between first- and second-line teams. With intuitive dashboards, advanced analytics, and streamlined workflows for identifying, assessing, and strengthening controls, RCSAs capture cross-organizational inputs to create more complete contextualized, and connected views of risks and controls. They also create a culture of accountability when it comes to organizational risk.

Trend 2: Flat Views of Risk Must Yield to Contextualization

It’s not enough to view risk from only one dimension or perspective. Risks manifest differently in different parts of the business, creating impacts requiring distinct responses and mitigating controls. Moreover, stakeholders understand risks in the context of their roles and scopes of ownership. Accordingly, it’s crucial to contextualize risks within the various organizational entities (e.g., subsidiaries, departments, regions, products) and tailor views to different stakeholders. The need is to map your business as a system, enabling you to zoom in to view risks in the context of a specific department or zoom out to understand the same risks from an enterprise perspective. 

Unfortunately, most organizations lack the means to create such views. Risk data is often disconnected, siloed, and protected by inadequate controls, making it challenging to ensure up-to-date, reliable, and readily available data. There’s little visibility into other teams’ data, little understanding of the context surrounding it, and no single source of truth, such that pivotal risk decisions are based on unverified data seen without key context.

How Tech Can Help

• Organizational hierarchies make risks’ interconnections easier to identify while offering a fuller picture of risk performance. Organizational structure mapping illustrates how different entities connect to specific risks, enabling users to see the risks tied to a specific entity or all entities tied to a specific risk. 
• Entity-based reporting presents a rolled-up, holistic picture of an entity, ensuring first-line owners always have up-to-date, personalized readouts (e.g., control effectiveness, KRI trends, outstanding mitigation actions) of what they need to do to own the end-to-end risk lifecycle for their slice of the business. 

Trend 3: Strategy Shifts Are Expected

Given rapidly changing internal and external dynamics, risk strategy shifts are now the expectation rather than the exception. Internal factors like expanding into new markets, being acquired, “tech debt,” or leadership changes, paired with external factors like regulatory changes, natural disasters, or elections, come together in a constantly shifting risk landscape. 

Risk professionals have a lot about which stay apprised. Proactive monitoring of risks and risk postures lead to critical, agile responses. However, risk data and processes are largely disconnected, manual, and reactive in many organizations, making risk monitoring and timely risk identification/mitigation difficult.

How Tech Can Help

• Risk appetite capabilities enable organizations to quickly take the pulse of organizational risk management, seeing where risk is at acceptable levels and where action is needed. By memorializing risk appetites and setting thresholds, teams are able to programmatically compare dynamically changing risk scores to their current risk appetites. 
• Enhanced key risk indicators (KRIs) enable more effective teams in predicting risks and potential impacts based on internal and external indicators. Fine-grained KRI thresholds reflect gradations between green, yellow, and red so teams can address potential risk exposure more quickly.

Innovating Risk Management Solutions for 2025 and Beyond

AuditBoard is purpose-built to help risk management teams transform challenges into strategic advantages. Every solution we build is designed around the use cases, workflows, pain points, and priorities of the teams we serve. Learn more about how AuditBoard’s industry-leading risk management software can help you turn 2025’s trends into opportunities to better understand the connections, context, and shifting dynamics underlying your organization’s key risks.