Risk in Focus 2025 Report: Global Survey Reveals Evolving Landscape of Organizational Risks

In a modern era marked by rapid technological advancement and global uncertainty, organizations worldwide are grappling with an increasingly complex risk landscape. The Risk in Focus 2025 report, a comprehensive study based on surveys conducted by the Internal Audit Foundation and the European Confederation of Institutes of Internal Auditing (ECIIA), sheds light on the current and future risk priorities of businesses across the globe.

The study, which gathered insights from over 3,500 internal auditors between March and May 2024, paints a picture of a business world where traditional concerns intersect with emerging threats, challenging organizations to adapt their risk management strategies continually.

At the forefront of current risk concerns, cybersecurity continues to reign supreme. An overwhelming 73% of respondents identified cybersecurity and data security as top priorities, underscoring the persistent and evolving nature of digital threats in our interconnected world. This finding comes as no surprise given the increasing frequency and sophistication of cyber attacks, which can result in significant financial losses, reputational damage, and operational disruptions.

However, the risk landscape is far from static. While cybersecurity maintains its top position, the study reveals a notable shift in risk perceptions over the next three years. Digital disruption, encompassing new technologies and artificial intelligence (AI), is projected to surge in importance, with 59% of respondents anticipating it as a critical risk by 2028, up from 39% in the current year.

This dramatic rise reflects the double-edged nature of technological advancements. As one internal audit director put it, "AI and other emerging technologies offer immense opportunities for innovation and efficiency. However, they also introduce new vulnerabilities and ethical considerations that many organizations are still struggling to navigate."

The report highlights several challenges associated with this digital transformation. Organizations face mounting pressure to adopt new technologies to remain competitive, often outpacing the development of adequate regulatory controls. This rapid pace of change is also widening the technology gap between regions with developed infrastructure and those without, creating additional risk factors for global businesses.

Interestingly, while digital risks are on the rise, traditional operational concerns remain significant. Business continuity, operational resilience, and crisis management rank as the second most critical current risk, with 47% of respondents highlighting its importance. This finding likely reflects the lasting impact of recent global disruptions, including the COVID-19 pandemic, which exposed vulnerabilities in many organizations' ability to maintain operations during crises.

Equally prominent is the focus on human capital, with 47% of respondents identifying issues related to diversity, talent management, and retention as top risks. This emphasis on workforce-related challenges speaks to the ongoing 'war for talent' and the increasing recognition of diversity and inclusion as critical factors in organizational success.

Perhaps the most striking finding of the Risk in Focus 2025 report is the projected rise of climate change as a critical risk factor. While currently outside the top five risks, climate change is expected to leap into fifth place within the next three years, with 42% of respondents anticipating it as a major concern by 2028. This surge in awareness reflects growing regulatory pressures, increasing instances of extreme weather events, and shifting public opinion on environmental issues.

The report's findings have significant implications for the internal audit profession. As risks become more complex and interrelated, internal auditors are challenged to develop new skills and approaches. The need for expertise in data analytics, AI ethics, and environmental risk assessment is growing, prompting many organizations to consider outsourcing or co-sourcing arrangements to fill these capability gaps.

"The evolving risk landscape demands a more agile and forward-looking approach to internal audit," notes the report. "Auditors must not only keep pace with emerging risks but also help their organizations anticipate and prepare for future challenges."

As organizations navigate this complex risk environment, the report emphasizes the need for integrated risk management strategies. The interconnected nature of modern risks – where a cybersecurity breach can impact business continuity, or where climate change can exacerbate geopolitical tensions – calls for a holistic approach to risk assessment and mitigation.

The Risk in Focus 2025 report serves as a crucial roadmap for organizations seeking to navigate the challenges of the coming years. By highlighting both persistent and emerging risks, it provides valuable insights for business leaders, risk managers, and internal auditors alike. As the global risk landscape continues to evolve, the ability to anticipate, understand, and manage diverse risk factors will be key to organizational resilience and success.

While cybersecurity remains the top concern for now, the rise of digital disruption, the persistent importance of operational and human capital risks, and the emerging threat of climate change paint a picture of a diverse and dynamic risk environment. Organizations that can adapt to these shifting priorities and develop comprehensive, flexible risk management strategies will be best positioned to thrive in the uncertain landscape of the future.

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