Predictive analytics can transform organisations' use of data and enable powerful risk-based insights through scenario modelling and interconnectivity analysis.
But how are risk leaders actually using (or exploring the use of) predictive analytics in their businesses?
In this article, we summarise insights we've gathered from future-thinking risk leaders across our network, to provide a lay of the land.
Fact file: what is predictive analytics in the context of risk management?
Getting started with predictive analytics
Using predictive analytics, risk teams can assist the business to limit losses whilst maximising gains in diverse strategic and operational areas. But how do you get started? Here are tips from risk leaders who are going through this process:
Initiatives and use cases across our network
Although most of our members are still in nascent stages of using predictive analytics and other advanced methods to strengthen their risk outlook, they have shared some of the projects they are undertaking and planning.
In the table below, we have highlighted different focus areas members are applying predictive analytics to, and the applications these may have.
| Focus area | Application |
| Risk exposures | Allows the risk function to input decades of historic data, run predictive models, and predict risk exposures and costs |
| Fatality focus | Identifies potential fatality and broader health and safety risks |
| Clinical trials | Could be used to identify risks in delivering clinical trials and gathering useful data |
| HR risk | May help business to increase retention, reduce turnover and optimise resources |
| Incident prevention | A central hub that knows company codes, standards and thresholds, and can recognise interconnectivities to predict potential incidents and breaches in real-time |
| Supply chain risk | Can be used to analyse supplier performance data, financial health, geopolitical risks, and previous disruptions to assess and predict the likelihood of supplier failures or delays |
| Climate modelling | May help to predict specific weather patterns and extreme events to inform climate-related disclosures and climate risk management |
| Financial forecasting | Enables probabilistic modelling for financial risk identification |
What's next?
Are you interested in learning more about predictive analysis and how other risk leaders in our network are beginning to incorporate this technique into their risk management methodology?
We are facilitating collaboration and benchmarking around this and other similar topics — such as AI — to help drive the use of advanced analysis methods forward and give members access to those with knowledge and experience using them.
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