Technology for risk management grows in companies, but Brazil remains behind

Over the past two years, changes in supply chains, geopolitical conflicts and the rise of cyber attacks have altered the way companies manage risk in their operations. In Brazil, care with technology grew in the period, but less than in other countries.

This is what PwC’s 2022 Global Risk Survey shows. According to the survey, 60% of Brazilian executives are increasing spending on technology this year to manage risks. Worldwide, it’s 65%.

This means that the country invests less in training people and adopting technologies to deal with potential risks than the rest of the world.

This type of investment is crucial in a context of increasing cyber-attacks. In the last two years, large Brazilian companies were hit by the so-called ransomware. In this method, the criminal group “hijacks” a company’s systems until a ransom is paid.

Concern about cyber risks, however, is just one of the five most targeted by executives. The others are with financial, geopolitical, operational and external risks.

In addition to being behind in the proportion of investment in technological risk management, Brazilian executives intend to invest more in process automation, while, on the global average, the focus is on data analysis.

While in Brazil 77% of executives intend to increase spending on automation, in the world it is 74%. Even compared to the Latin American average, Brazil is also ahead in investment in automation and behind in other types of spending.

The difference already distinguishes two moments of investment, says Evandro Carreras, partner at PwC Brasil.

“It seems to be a natural evolution depending on the maturity of the business. There is an initial need to invest in the automation of risk management processes, and then increase the focus on data analysis. In any case, the survey shows that Brazil is a little behind the rest of the world in investments to improve technologies for risk management”, he said.

There are also differences between sectors. While Brazilian banks have modern technologies and skilled human resources, other sectors are still in the maturing phase.

“Many companies still do not have technological tools that help in the management, detection and monitoring of risks. In the last two years, mainly, the relevance of the topic in Brazil has become clear. We have had more and more frequent attacks, relevant problems in the supply chain and geopolitical issues never before considered,” Carreras said.

Brazil appears ahead of the rest of the world in the proportion of organizations that recognize that keeping up with the speed of digital transformations is an important risk management challenge. Here, they are 89%, compared to 79% abroad.

Despite the country positioning itself behind the global rate and the rest of Latin America in terms of investments, there is a significant improvement on all fronts surveyed, the biggest being the concern with digital risks.

“This perception of urgency and relevance of the topic among Brazilian executives is essential for the country to reach a level of maturity in risk management”, evaluates Evandro Carreras, from PwC.

“They realized that an improvement in risk management generates value for the business, increases stakeholder confidence and strengthens operational resilience in times of great turmoil like the ones we are experiencing.”

The PwC Global Risk Survey 2022 was conducted with 3,584 business, risk, audit and compliance executives between February 4 and March 31, 2022.

Business executives represent 49% of the sample. The remaining part is split between audit executives (16%), risk management (24%) and compliance (11%).

Of the total, 12% of respondents are in Latin America.