Definition of risk intelligence
Risk intelligence is a systematic approach to identifying, assessing, and managing an organization’s risks.
It is one of the phases before crisis management.
This method collects and analyzes information about people, places, and events for intelligence purposes.
In this context, intelligence refers to information obtained after examining an organization’s sources.
The intent is to assess the risk and manage it adequately.
Risk intelligence has been used in many domains and fields, such as business administration and management, public relations, insurance, architecture, and engineering.
According to Leo Tilman, risk intelligence is:
‘The organizational ability to think holistically about risk and uncertainty, speak a common risk language, and effectively use forward-looking tools to make better decisions.’
Risk intelligence is an approach to decision-making that uses the information gathered from multiple sources to assess and address current or potential risks.
Risks assessment is based on the following:
- Knowledge and experience;
- Data analysis;
- Social media;
- Qualitative and quantitative assessment tools.
According to the Deloitte report on Risk intelligence issues in global energy and resources industry, these two techniques are not balanced.
88% of organizations surveyed currently use qualitative self-assessments to perform risk analyses.
Predictive risk analytics and quantitative methods are less widespread.
What is risk intelligence?
Risk intelligence is not new.
Indeed, risk intelligence is one of the oldest forms of business analysis.
It helps identify and mitigate potential threats to an organization’s resources, people, and corporate reputation.
Risk intelligence identifies and quantifies the risks associated with a specific project or event.
There are many different approaches to risk intelligence.
One is to identify all the hazards a project or event might face and then prioritize them according to their severity, likelihood, and persistence.
A risk prioritization process might look like this:
- Risk identification.
The first step is identifying potential risks to a project or event.
- Prioritization.
Each risk is prioritized based on severity, the likelihood of occurrence, and the long-term outlook.
2. Risk calculation and value.
Each risk implies a quantifiable economic loss or benefit; thus, businesses must calculate their current value.
3. Risk comparison.
All risks are compared in terms of net current value over ten years.
4. Risk classification
Risks with higher expected benefits are given more weight than low-risk scenarios.
Risk intelligence applies to many different fields.
Since it is used by governments, the army, and businesses to support online reputation management, it has grown in popularity in recent years.
