Economic, demographic and geopolitical trends, as well as technological advancements are transforming traditional risks for global businesses, says Aon’s 2017 Global Risk Management Survey, released April 24.

“We are living in a challenging new reality for companies of all sizes around the world. There are many emerging influences that are creating opportunity, but at the same time, creating risks that need to be managed,” says Rory Moloney, chief executive officer for Aon Global Risk Consulting. “As the risk landscape for commerce evolves, businesses can no longer rely solely on traditional risk mitigation or risk transfer tactics. They must take a cross-functional approach to risk management and explore different ways to cope with these new complexities.”

Reputations more vulnerable

The top concern for global businesses is damage to reputation. Though the main risks to companies’ reputations are defective products, fraudulent business practices, and corruption, businesses are increasingly concerned with social media amplifying their impact, making their reputations more vulnerable, says Aon.

Another top risk is cyber-crime, rising from number nine to number five on Aon’s risk list this year. It is the top concern for North American businesses, due to an increase in cyber breaches, as well as incident response plans becoming more complex because of regulations and mandatory disclosure obligations, explains Aon.

Political risks in emerging markets

Political risks and uncertainty has now become a top concern, climbing the ranks from fifteenth to ninth. Meanwhile, risk preparedness has dropped from 39 per cent in 2015 to the current 27 per cent. “Interestingly, developed nations that were traditionally associated with political stability are becoming new sources of volatility and uncertainty. This is a concern for businesses, especially those operating in emerging markets,” says Aon, noting that  its latest 2017 Risk Maps show that trade protectionism is on the rise “while terrorism and political violence ratings are the highest they have been since 2013.”