Great risk management has never been more important. Considering cyberattacks, politics, and trade wars, financial institutions rely more than ever on their risk leaders to navigate uncertainty. But as the world changes, so too must risk management. Not only are risks proliferating, but so are solutions. In an AI-empowered future, new skills and capabilities will be required. Risk functions will need to be more agile, more cross-functional, and more tech-driven. In the next three to five years, executives, starting with leaders of risk functions, must embrace transformation and start to implement the required changes. Geopolitical flux as the new normal. The World Uncertainty Index is nearly nine times higher than it was 20 years ago, reflecting all the geopolitical disruptions of the past few years as well as the new normal of geopolitical uncertainty.1Comparing third quarter 2025 with fourth quarter 2005, 'World Uncertainty Index: Global: GDP weighted average,' Federal Reserve Bank of St. Louis, updated November 2, 2025. Global supply chains, capital and trade flows, cyberattack patterns, and shifting domestic policies are feeling the effects of this uncertainty. In response, risk leaders will require more dynamic and forward-looking planning and forecasting frameworks flexible enough for rapidly changing environments. Activities such as stress-testing will also need to be more dynamic and consider a broader set of possible scenarios. Risk managers will need to have their finger on the pulse every day and have access to standing and response capabilities more agile than the ad hoc 'war rooms' of the past....
Sizable startup funding announcements continued to roll in this week, with the largest rounds coming in the form of growth equity investments to Quavo Fraud & Dispute Solutions and Vanta, two companies in the dispute and risk management spaces. We also saw good-sized financings tied to AI and biotech. 1. Quavo, $300M, dispute management: Dispute management software provider Quavo announced that it secured $300 million in a growth equity investment from Spectrum Equity. The 10-year-old Wilmington, Delaware-based company offers tools for banks, credit unions and fintechs to manage consumer transaction disputes. 2. Vanta, $150M, compliance and risk management: Vanta, developer of AI-enabled tools for enterprise compliance and risk management, raised $150 million in Series D funding. Wellington Management led the financing, which sets a $4.15 billion valuation for the San Francisco-based company. 3. Armada, $131M, edge computing: San Francisco-based Armada, developer of an edge computing platform for communications-challenged areas, locked down $131 million in fresh funding. It plans to use the funds to scale Leviathan, its megawatt-scale, full-stack modular data center....
For the third year in a row, MIT Sloan Management Review and Boston Consulting Group (BCG) have assembled an international panel of AI experts that includes academics and practitioners to help us gain insights into how responsible artificial intelligence (RAI) is being implemented in organizations worldwide. Last year, we published a report titled 'Building Robust RAI Programs as Third-Party AI Tools Proliferate.' This year, we continue to examine organizational capacity to address AI-related risks but in a landscape that includes the first comprehensive AI law on the books ' the European Union's AI Act. To kick things off, we asked our experts and one large language model to react to the following provocation: Organizations are sufficiently expanding risk management capabilities to address AI-related risks. A clear majority (62%) of our panelists disagreed or strongly disagreed with the statement, citing the speed of technological development, the ambiguous nature of the risks, and the limits of regulation as obstacles to effective risk management. Below, we share insights from our panelists and draw on our own observations and experience working on RAI initiatives to offer recommendations on how organizations might leverage organizational risk management capabilities to address AI-related risks....
