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Singapore’s risk exposure: High turbulence, low visibility

ARTICLE | December 1, 2023

Singapore’s risk exposure: High turbulence, low visibility

New research warns of unpredictable risks for the city-state’s businesses

By Mark Yeow, Workflow contributor

Despite growth in the variety of risks that businesses face, only 10% of Singaporean enterprises are effectively addressing and minimising their risk exposure, according to ServiceNow’s latest research with ThoughtLab.

Gaining greater visibility into organisational threats, however, could help improve those readiness levels and raise the resilience of Singapore’s overall economy too.

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Singaporean organisations face the most challenges in managing risk in areas that represent relatively new market developments. Thirty-six percent of organisations, for example, expect rising risks because of increasingly stringent ESG (onmental, social, and governance) regulations and the government’s evolving policies for socioeconomic stability. Although 55% are already assessing and managing ESG risks, 54% are still improving their regulatory compliance, suggesting that while many organisations are making progress, a substantial number are still not recognising and responding to the threats they face.


The gap between awareness and action becomes most acute when it comes to cybersecurity. Although 58% of Singaporean organisations expect cyber disruptions to increase in the next two years, only 43% are currently employing cybersecurity technologies as part of their risk management efforts. That disparity could potentially leave billions of dollars of revenue exposed to otherwise avoidable—or at least manageable—cybersecurity threats.

Singaporean organisations have also struggled to prepare for more recognized risks, such as supply chain disruptions. Despite the city-state’s reliance on trade and smooth logistics, 44% say they lack supply chain resilience, amplifying the possible impact of such disruptions.

It’s clear that the complexity and scale of these issues go well beyond what a single risk division or organisational unit is equipped to handle. To better perceive and respond to risk exposure, organisations will need to foster more cross-functional alignment in the future.

Forty-four percent of all Singaporean organisations say they lack supply chain resilience, amplifying the possible impact of future disruptions.

This alignment requires a holistic picture of risk and resilience in the organisation, especially in terms of how teams interact with each other. However, 45% of Singaporean organisations report having a limited cross-functional view, higher than peers in Asia and the global average.

This may be partly due to relatively low levels of “risk-tech” adoption in Singapore. Just like with cybersecurity technology, the adoption of technology associated with improving resilience, such as digitising workflows and modernising IT platforms, remains relatively low compared to other markets in the Asia-Pacific region. Adopting such technologies also correlates with stronger risk readiness and, subsequently, resilience of profits and margins in the face of turbulence.

With a cross-functional view in place, leading Singaporean organisations should consider how to align their teams’ actions and decision-making when addressing large-scale risks. To date, only 41% of Singaporean organisations involve IT and risk teams in their innovation strategies, although 51% are building risk-aware cultures that span organisational divisions. 

Enhancing risk readiness demands significant investment from organisations, which may prompt Singaporean leaders to ask if such a comprehensive transformation of processes is worth the cost.

Our research found that improving risk readiness doesn’t just mitigate harm against organisations and potential loss of revenues; it also boosts overall business health and growth. Amongst organisations in the Asia-Pacific region with a robust risk strategy in place:

  • 74% saw reduced costs, compared to only 42% of those at the beginning of their risk-readiness journey

  • 64% achieved greater market share, compared to only 21% of risk management beginners

  • 62% achieved higher profits, compared to just 23% of beginners

To date, Singaporean organisations have been more likely to invest in productivity solutions to build operational resilience than other markets, reflecting the country’s longtime obsession with productivity metrics. If these same organisations want to maintain their edge in turbulent times, investing in greater risk readiness may be a much more productive strategy.

The pandemic has taught and reinforced leadership lessons that will not be easily forgotten, and there is an awareness that the future will be rocky. But awareness needs to translate into action—in this case, improving cross-functional views of risk with technology, as well as providing clear, collaborative metrics and goals around risk management. Doing so will help Singapore navigate uncertain waters, where both greater risk and opportunity reside.

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Author

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Mark Yeow's first foray into the world of journalism and content was in high school, writing articles about antique furniture that he patched together between studying and video games. Since then he's written about everything from environmental science to wireless technology to trends in global trade, alongside citizen video journalism for social impact causes around Southeast Asia. Raised in Australia, he currently resides in his birthplace of Singapore but struggles to say which is truly home.

Articles by Mark Yeow