Risk is inherent in everything we do, and while great pains are taken to reduce its influence, it continues to shape decisions both at home and in the business place.
Executives often find themselves in a precarious position when it comes to risk, as it needs to be mitigated without negatively affecting growth. According to research, this is getting more difficult to control, as spending on risk management increases along with the rise of new tech trends.
How much is spending increasing?
According to financial research company IDC, spending on risk management software and services will continue to grow throughout 2015. The actual rate of growth predicted by the firm rests at nearly 7 per cent (6.97) for the years 2013-18.
In total, this results in spending of over US$78 billion in this year alone, which will then rise to $96.3 billion by 2018 if forecasts are accurate.
This increase is matched by a rise in IT expenditure for the financial services industry. IDC predicts this will grow to $458.4 billion by the end of the year, and includes software, hardware and both external and internal IT support.
The proportion of spending on risk is also set to increase, with figures suggesting that as more technology is implemented, better risk management procedures must follow suit. IDC is forecasting 17.1 per cent of IT expenditure to incorporate risk management plans this year, jumping to 18.4 per cent by 2018.
“As institutions begin to see the connection between digital strategies and risk strategies, and new innovations from 3rd platform vendors unfold, traditional Fintech vendors will be challenged to demonstrate value in digital strategies while at the same time discover white space opportunities,” explained Global Research Director for Financial Insights at IDC, Michael Versace.
“To meet this challenge, Fintech vendors will require deeper insights into enterprise strategies, brand and product perceptions, unmet needs, and important buying triggers.”