When it comes to risk management, strategists consistently outperform the traditionalists. As a result, risk management today is moving away from its long-standing reliance on manual operations and moving to compliance automation.

These are some of the key findings in a recent global risk transformation study conducted by the consulting firm Ernst & Young LLP — commonly known as EY. The changing mindset in risk management underpins the strategic alliance EY and AuditBoard Inc. have formed, with an eye on using their shared expertise to drive real solutions, according to Jim Sperduto (pictured, left), chief growth officer at Auditboard Inc.

AuditBoard’s Jim Sperduto and EY’s Scott McCowan talk with theCUBE about compliance automation.

“There’s a lot that is coming at our customers from a risk perspective,” he said “There’s real problems that they have to solve, and they need to lean on both technology, as well as expertise, to be able to solve those problems. That’s what we’re intending to do.”

Sperduto and Scott McCowan (right), global consulting risk markets leader at EY, spoke with theCUBE’s Rob Strechay and Rebecca Knight at Audit & Beyond, during an exclusive broadcast on theCUBE, SiliconANGLE Media’s livestreaming studio. They discussed the recent EY study as well as the impact of compliance automation industries such as financial services. (* Disclosure below.) 

Compliance automation meets advisory muscle

In its study, EY surveyed 1,200 companies and conducted 40 interviews. Questions surrounded topics such as the use of data-driven approaches to risk management and the extent of artificial intelligence adoption for compliance automation. The study found that risk managers whose answers indicated a more strategic mindset also reported better results, according to McCowan.

“There was this void in responses where we brought in statisticians and created these personas of a risk strategist versus a risk traditionalist. In the essence of that is those risk strategists actually show that there’s better company and business performance by a strategic approach to risk management, and the risk traditionalists are lagging behind,” McCowan explained. “It’s really a rally cry to the industry to say: ‘We need to be thinking about risk differently today.’”

These findings tie into AuditBoard and EY’s perspective that risk management can no longer be primarily driven by regulatory and compliance concerns. Instead, it has to be able to respond to the full range of current events, such U.S.’s ongoing tariff saga or the changes in H-1B visas, according to McCowan. For the financial services industry in particular, approaches to risk management need to evolve.

“The study itself said that financial services fared no better than any other industry in this assessment of risk strategists versus risk traditionalists, because one of the things that’s made them so successful in risk is that it’s regulatory driven,” he explained. “Now that you have to think differently about the impact of other emerging risks, financial services has to respond the same exact way.”

Here’s the complete video interview, part of SiliconANGLE’s and theCUBE’s coverage of the Audit & Beyond event:

(* Disclosure: TheCUBE is a paid media partner for the Audit & Beyond event. Neither AuditBoard, the sponsor of theCUBE’s event coverage, nor other sponsors have editorial control over content on theCUBE or SiliconANGLE.)

Photo: SiliconANGLE