Make Room for 2024 GRC Trends: Experts Say GRC Solutions are the Way to Go!
Another tumultuous year ends. After enduring a ream of shocks, the idea that CEOs, CIOs, CROs, and compliance leaders worldwide have cracked the ‘survival code’ is wishful thinking. Most companies and their leaders must recalibrate strategies and business processes to face macroeconomic volatility and confidently embrace the AI boom in 2024. Governance, risk, and compliance (GRC) professionals can help prepare organizations for emerging regulatory, risk, and technology developments. Their extensive knowledge of GRC requirements, frameworks, and integrated risk management tools and technologies, including OpenPages with Watson, helps firms manage and mitigate risks, enforce data and IT governance, and enable ESG compliance.
Our team researched and corroborated insights from the learnings of our GRC experts to help tackle new GRC trends and manage the risk management priorities of C-suite leaders in 2024. A brief run-through of the trends expected in the new year can help CROs and compliance executives recognize opportunities amid adversities to thrive and transform their businesses.
But first, let’s revisit some of the most significant world events that impacted the GRC objectives of businesses in 2023.
Major World Events in 2023: Exactly Why Business Needs a GRC Platform
- Rising Inflation and Interest Rates
Global central banks surged their interest rates over the last two years in response to rising inflation. During November, many central banks, including the US Federal Reserve and other European banks, paused interest rate hikes to observe changes in inflation trends. The Fed’s interest rate remains at 5.25-5.50%, find Reuters reports. According to the IMF’s World Economic Outlook Update, global headline inflation is at 6.8%, and core inflation is predicted to decline gradually in 2023 and peak upwards in 2024. After showing signs of resilience in the first half of the year, the global economic growth rate was expected to increase by 3% and decline to 2.7% in the coming year.
- Fall of the Silicon Valley Bank
The shutdown of the Silicon Valley Bank (SVB) in March 2023 by the California Department of Financial Protection and Innovation was yet another banking failure that unfolded amid the fears of recession in the US. The decline in investment value, mismanagement of investment risks by the bank’s senior management, and lapse of judgment in predicting its regulatory vulnerabilities led to its complete collapse, gravely impacting the depositors, shareholders, debt holders, and investors as most of the funds were uninsured. The SVB Financial Group, the bank’s parent company, filed for bankruptcy on March 17th.
- Artificial Intelligence (AI) Explosion
The launch of the large-language model-based ChatGPT pushed AI to the public eye, pivoting many GenAI-led use cases and AI initiatives across governments, businesses, and entities. In less than a year since the launch of GenAI tools, almost one-third of the users across industries reported using it in at least one business area. And 22% of users claimed its regular usage in daily work, according to McKinsey’s The State of AI in 2023 survey. There was large-scale adoption of AI across fields, from pacing clinical and pharmaceutical developments to applications in aerospace and defense to automation of customer care and back-office support.
The flip side of this breakthrough and its meaningful adoption were glaring concerns about the fairness of AI models and their role in widening societal inequalities, discrimination, and replacement of human intelligence and mass unemployment. The debates about the ethics and dangers of AI triggered collective actions from businesses, regulators, and leaders to multiply the benefits of AI and curtail the possibilities of risks.
- Geopolitical Tensions and Civil Wars
- US and China Tensions: The appearance of the Chinese surveillance balloon across the North American airspace strained the political ties between the US and China. The flying object was spotted and shot down by the U.S. Air Force F-22 Raptor after suspecting infiltration and a threat to the safety of civilians. US Secretary of State, Anthony Blinken traveled to Beijing in June as per the initial agenda of building bilateral trust. However, the discussions could not pre-empt the imposition of trade restrictions on China or ease its other militarized and political
- Takeover of Nagorno-Karabakh: Even three decades after the disintegration of the Soviet Union conflicts prevailed between Armenia and Azerbaijan. Recently, in 2020, Azerbaijan lost its control of Nagorno-Karabakh and led an attack again in 2023, which caused over 85% of its population who were Armenians to escape to Armenia. This led to citizens’ protesting the Armenian government and Russia’s failure to protect Nagorno-Karabakh.
- Civil War in Sudan: 2023 would have been the year of democracy for Sudan. But the country has already endured several civil wars, and the conflicts led by its military forces against the dictatorship of Omar al-Bashir resurfaced as an attack of the RSF forces on SAF bases. The aftermath of the attacks led to the death of over 10,000 civilians and displaced 5.6 million of Sudan’s population.
- Russia-Ukraine War: Russia’s hold over eastern Ukraine and Crimea increased at the start of this year. After nine months of continuous bloodshed and destruction, there are conversations and concerns about whether Ukraine can sustain the war, while Russia had a two-fold increase in its troops in Ukraine. The stress of the invasion of Ukraine by Russia has impacted the West, including the US, which has run out of funds for continued aid to Ukraine. There are no signs of a slowdown of the attacks by Russia.
- Israel-Palestine Conflict in Gaza: The surprise attack of Israel by the Hamas-led Palestinian militant agency on October 7th is one of the deadliest chapters for Israel, with 1,200 Israelis killed and more than 240 individuals held hostage. Israel responded with airstrikes in Northern Gaza, targeting the militant group and paused with a negotiation to release roughly a hundred hostages. The war resurfaced in Southern Gaza. These retaliations led to the devastating scale of suffering and tragic deaths of Israeli and Palestinian civilians.
- Climate Risks
October 2023 recorded the warmest temperature with an increase of 1.43°C above the pre-industrial average. The global sea surface temperature (over 60°S and 60°N) is at 20.79°C in 2023. Calamities from extreme weather events across the globe, like wildfires, floods, and droughts, directly affect 70% of the global economic sectors. These events have sparked cautionary measures and collaborative investments by governments, venture capitalists, and large corporations to control carbon emission levels and promote clean energy alternatives to achieve net-zero goals. The recent discussions at the COP28 events in Dubai, UAE, had nations plan and act on sustainability projects and commitments.
Eight Transformative GRC Trends for 2024: Time to Prep Your GRC Solutions Checklist
A glimpse into the events, particularly the banking failures and business revenue losses in billions, makes one wonder if we did learn anything from the 2008 global economic recession. Although signs of recessions, risks, and climate crises are apparent, their impacts are always sudden. Often, the impacts are more severe for vulnerable communities. In the age of digitization, AI evolution, and consumer’s growing awareness about the economy and environment, businesses still have hope to unlock transformation and build immunity against complex shifts.
Although the road ahead is plagued with unpredictability, the reflections from the ongoing events and past failures instill a sense of familiarity. With the AI-driven OpenPages solutions for GRC, businesses can get a better grasp of the GRC landscape. To simplify your transition into the new GRC strategies, we have compiled eight important GRC trends to watch out for in 2024:
- Connected GRC Solutions & Tools: Gone are the days of siloed systems and tools for risk management. Every enterprise and business prefers solutions that center all aspects of GRC integrated into one platform, allowing users and stakeholders a cohesive view of the workflow and strategies to communicate and share insights among departments and teams. Many cloud-enabled GRC platforms help connect and streamline processes, stakeholders, documentation, and reports in real time, fostering connectivity and collaboration to make informed decisions related to GRC. Along with predictive modeling capability, the connected GRC platforms promise better benefits from the qualitative assessments and analyses. It helps curb unnecessary costs, enhance data and cybersecurity, increase adherence to recent regulatory norms, and improve operational efficiencies.
Additionally, with low-code development platforms, organizations can configure cloud-based connected GRC solutions with superior security, automation controls, and unparalleled accessibility.
- Automation in GRC Practices: One of the primary advantages of implementing integrated GRC solutions is to bring every detail and process into a single platform. Automated solutions centralize the GRC processes and documents, and increase performance efficiency with functions like automated reporting, control testing, and evidence collection, documentation, dashboard updates, data validation, and more. The AI-led automation guarantees accuracy and incremental reduction of manual administrative tasks associated with GRC practices.
- Rise of Cyber GRC: This new specialized branch of GRC oversees cybersecurity risks. The growing levels of cybersecurity-related threats and attacks and their sophistication spurred its development. Organizations can select from industry-leading vendors providing dedicated GRC software to deploy cyber GRC tools and practices to implement prudent cybersecurity and risk management measures.
- Cognitive Technologies in GRC Software: AI’s cognitive intelligence in driving GRC decisions has a tremendous opportunity to improve and automate repetitive processes in risk assessments, audits, and GRC reporting. The accuracy of AI-led GRC platforms and tools helps businesses analyze large volumes of data and data models for real-time insights. It helps predict and remediate compliance issues and risk probabilities, allowing faster and more intelligent actions with minimal human intervention. OpenPages with Watson’s highly scalable, AI-powered, and integrated GRC platform to adapt to the changing business and regulatory climate. It readily demonstrates cognitive capabilities to enable end-to-end governance.
- Continuous Monitoring Technologies in GRC Platform: There have been new advancements in continuous monitoring that help unravel risk correlations and connections by risk management teams. With the pace at which changes and risks surface, organizations cannot rely on sample-based assessments and manually prepared risk management models. The adoption of continuous monitoring technologies in GRC platforms increases to help businesses proactively detect risks and threats.
- Data Science and Advanced Analytics-led GRC Solutions: Regarding GRC, organizations do not prefer guessing games. They require accuracy and data-backed evidence to dive into their risk management practices. GRC platforms like OpenPages with Watson, built on IBM’s container-based integrated data and analytics platform, are the way forward for businesses looking for an advanced data science toolkit to build GRC models. Advanced analytics help improve risk assessment capability, decision-making, and GRC resource allocation.
- Third-party Risk Management: The need for integrated third-party risk management has increased to help businesses pursue their growth initiatives without fear of data and intellectual property risks. Third-party risk management solutions help reduce disruptions to the brand, compliance, and operations. It helps centralize all third-party dangers, regulations, controls, and more into one platform, enabling insights into the state or level of risks throughout a business to take proactive measures and decisions. In 2024, many organizations will require third-party risk management to deal with data proliferation, increased data breaches, privacy issues, and increased regulatory scrutiny.
- ESG GRC: Environmental, social, and governance (ESG) is a global business objective. Only 20% of consumers trust corporate sustainability in 2023, finds IBM research. With more regulations adding up to make ESG reporting compulsory across industries, businesses must comply with the ESG requirements to add competitive advantage and satisfy their customers, investors, and communities with a solid and ethical brand image.
Integrated GRC Solutions: Answer to the New-generation Risks
ITech GRC is a leading business solutions provider that strives to help modern businesses tackle next-generation risks and challenges with its integrated risk management solutions. Guided by the vision to build risk-free and compliant organizations, our experts bring fresh insights and strategies for building business resilience and a sustainable environment.
Watch this space for more detailed blogs on iTech GRC expertise to help businesses make the most of the OpenPages platform to meet their GRC requirements.
Contact our team to kickstart your risk management and GRC projects with our A-team of experts!