Competition, market risks top concerns in Latin America: Study

Competition and market, financial and regulatory risks top the lists of concerns for risk management professionals in Latin America, according to a new study.

The 2018 Risk Management Benchmark in Latin America report found that 66% of risk management professionals in the region highlighted competition and market risks when asked about the top 10 risk areas for their organizations, followed by financial risks at 63% and regulatory risks at 56%, according to the report published Wednesday by Marsh Risk Consulting and the Risk and Insurance Management Society Inc. Talent risks, cited by 49% of professionals, and business continuity exposures, cited by 47%, rounded out the top five areas of risk concern.

Only 34% of respondents put cyber risk in their top 10 list while 42% placed occupational health and safety on that list, according to the survey.

About 25% of Latin American companies have advanced levels of maturity in risk management, with another 70% formalizing or establishing risk management and only 5% not developing risk management within their organizations, according to the report.

Meanwhile, 51% cited cultural problems as a prior or ongoing challenge to implementation of risk management within the organization, with risk management being viewed as a compliance rather than strategic issue and lack of knowledge and understanding of the importance of risk management within the organization tied at 46%, according to the report.

Fifty percent of companies in the region do not assess emerging risks, with 55% reporting that the lack of knowledge of key risk management concepts was the biggest obstacle to understanding the impact of emerging risks on strategy, followed by an inability to model the magnitude of the risk at 50% and cultural and institutional themes at 48%.

Regulatory risk was cited as the main emerging risk area at 90.3%, followed by changes in customer or market trends/demand behavior at 88.8% and cyber attacks at 88.4%.