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Turn risk into opportunity with Dynamic Risk Assessment

Turn risk into opportunity with Dynamic Risk Assessment

Dynamic Risk Assessment provides insights into risk that can enhance capital allocation, decision making, resilience and agility.

Kevin Smout

Partner, Risk Strategy & Technology and Global Leader for Governance, Risk & Assurance Services

KPMG Australia


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What if you knew how emerging technology would affect your business? Were prepared for mega-tends before they happen? Could respond effectively to the changing regulatory landscape? What if you were able to turn risk into opportunity and increase resilience while disruption and volatility unfold?

In these turbulent times, organisations need to approach risk assessment with fresh thinking and innovative solutions. As economic volatility becomes the norm, and the past is no longer an indicator of things to come, seemingly disparate events can become inextricably linked. This makes assessing risk exposure especially difficult because risk is unpredictable and contagious, and connected globally within complex organisational structures.

Focus needs to shift. It’s increasingly important to understand and monitor emerging risks and be aware of what out of trend risks (structural breaks) could arise in this age of disruption.

KPMG’s Dynamic Risk Assessment (DRA) is an evolution in risk assessment that applies network theory, sophisticated algorithms, mathematics and advanced data and analytics together in a KPMG proprietary methodology to identify, connect and visualise risk in four-dimensions.

This unparalleled view looks beyond conventional depictions of risk, typically based solely on likelihood and severity, by taking into consideration risk interconnectedness and the velocity with which risks can impact business operations.

Combining the latest in applied science with KPMG insights and extensive benchmarking, DRA modelling allows our risk professionals to see where risks can be expected to form critical clusters or trigger ‘contagion’ with other risks. By exposing the expected contagion effects between global and enterprise risks, we help clients to objectively measure the genuinely significant threats, as well as to understand what out-of-trend risks (macroeconomic, socio-political and other emerging megatrends) could arise in this age of disruption.

These fresh insights arm our professionals with new levels of risk assessment that work to enhance our clients’ understanding of their risk profiles for more-informed decision making within their organisations about how best to tackle and monitor risks and define future strategy. By illuminating which risks impact each other and the relative strength of those connections, our professionals can help clients to determine where best to allocate scarce resources to create more robust control environments and increase resilience. Further, enriched understanding of current and emerging risks provides our clients with the knowledge needed to be agile giving rise to a competitive advantage.

© 2020 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Liability limited by a scheme approved under Professional Standards Legislation.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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