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    KPMG Dynamic Risk Assessment

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    Opeyemi Akinkugbe
    Dynamic Risk Assessment (DRA) is a proprietary methodology developed by KPMG to help organizations better understand risks. It identifies interconnected risks, considers how they impact each other over time, and visualizes them across four dimensions: likelihood, severity, velocity, and contagion. Through surveys and advanced analytics, DRA provides insights into an organization's greatest systemic risk exposures and clusters to inform risk mitigation strategies. The typical DRA process takes 6-8 weeks and results in a report discussing the organization's risk network dynamics and implications for strategic planning.

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    KPMG Dynamic Risk Assessment

    Uploaded by

    Opeyemi Akinkugbe
    189 views2 pages
    Dynamic Risk Assessment (DRA) is a proprietary methodology developed by KPMG to help organizations better understand risks. It identifies interconnected risks, considers how they impact each other over time, and visualizes them across four dimensions: likelihood, severity, velocity, and contagion. Through surveys and advanced analytics, DRA provides insights into an organization's greatest systemic risk exposures and clusters to inform risk mitigation strategies. The typical DRA process takes 6-8 weeks and results in a report discussing the organization's risk network dynamics and implications for strategic planning.

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    Dynamic Risk Assessment (DRA) is a proprietary methodology developed by KPMG to help organizations better understand risks. It identifies interconnected risks, considers how they impact each other over time, and visualizes them across four dimensions: likelihood, severity, velocity, and contagion. Through surveys and advanced analytics, DRA provides insights into an organization's greatest systemic risk exposures and clusters to inform risk mitigation strategies. The typical DRA process takes 6-8 weeks and results in a report discussing the organization's risk network dynamics and implications for strategic planning.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    189 views2 pages

    KPMG Dynamic Risk Assessment

    Uploaded by

    Opeyemi Akinkugbe
    Dynamic Risk Assessment (DRA) is a proprietary methodology developed by KPMG to help organizations better understand risks. It identifies interconnected risks, considers how they impact each other over time, and visualizes them across four dimensions: likelihood, severity, velocity, and contagion. Through surveys and advanced analytics, DRA provides insights into an organization's greatest systemic risk exposures and clusters to inform risk mitigation strategies. The typical DRA process takes 6-8 weeks and results in a report discussing the organization's risk network dynamics and implications for strategic planning.

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    © All Rights Reserved
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    Dynamic Risk Assessment (DRA)

    Identifying, connecting and visualizing


    risk in four dimensions
    2021

    Dynamic Risk Assessment (DRA) is a proprietary fit for the future as the forces and trends that shape our
    methodology developed by KPMG to help bring a better future have increasingly not manifested themselves before.
    understanding of the risks organizations face in today’s Moreover, risks combine. They spill over into each other—they
    complex world of developing technology, emerging don’t manifest neatly in isolation—and we no longer have the
    markets, climate change, growing populations and other luxury of dealing with risks discretely.
    mega trends that interact to shape our future. DRA takes
    an unprecedented approach to gaining insights into There is a need to advance beyond historical risk analyses
    clients’ risk environments by pinpointing central risks and comprising two-dimensional depictions of expected
    shedding new light on the risk mitigation strategies. probability and severity, and consider a third, and indeed a
    fourth dimension: velocity and contagion. This, together with
    In today’s highly interconnected and volatile world, dominated the consideration of global trends that are shaping our world,
    by new technology and emerging business models, the past is what Dynamic Risk Assessment encompasses.
    is no longer a reliable guide to the future. Past data is a poor

    DRA vs. Traditional Risk Assessment


    Traditional, two dimensional risk map Inter-connected view

    High The individually most


    significant risk exhibits low
    Likelihood and severity
    levels of expected contagion
    of this cluster exceeds
    those of this single risk
    Potential impact

    This individually insignificant


    risk has hidden systemic
    significance: It triggers many
    other risks into existence, all of
    Connectivity strength:
    Likelihood

    them more significant than itself


    low
    Low Likelihood of occurrence High medium
    high Severity
    Certain risks connect more to each other than all other risks in the network, forming clusters.

    DRA applies graph theory, the science of expert elicitation, risk and non-risk frontline and back-office individuals within
    actuarial modeling, sophisticated mathematics and financial the business. This is done in a KPMG proprietary (and patent
    mathematical algorithms, advanced data & analytics (D&A) pending) methodology to identify, connect and visualize risk
    and accounting science to assessments from experienced in four dimensions.
    The DRA methodology combines qualitative and quantitative data to help identify:

    Your greatest systemic How risks will impact A framework to revisit


    risk exposures, each other in the network your risk tolerance and
    combinations and risk and how they behave in overall risk management
    clusters to inform a risk a dynamic manner over strategy
    mitigation plan time

    Insights that may help you improve


    mitigation of systemically critical
    The impact of “mega risks, to aid you in developing an
    trends” and their effects investment strategy to counter
    on your business those weaknesses

    The DRA process


    Typically, the end-to-end DRA process takes six to eight weeks, with the key steps outlined below:

    KPMG Deliver
    Landscape Follow Up
    DRA Survey KPMG Analysis Dynamic Risk
    articulation Workshop
    Assessment Report

    1 2 3 4 5
    KPMG works with Key stakeholders KPMG applies KPMG discuss the The DRA report is
    key stakeholders complete an online advanced network findings with the discussed with the
    to identify the key survey, for the theory to the key stakeholders. client to form part
    risks facing the collection of data on survey responses of strategic planning
    organization. the characteristics to identify the and ongoing
    of the risks facing organization’s monitoring.
    the organization. interconnected risks
    and opportunity
    The survey requires
    network, and it’s
    approx. 45 min to
    dynamics.
    complete.

    Joey Gyengo

    Contact us Principal, Consulting


    ERM Solution Leader
    T: 404-520-5327
    E: jgyengo@kpmg.com

    The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.
    Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is
    kpmg.com/socialmedia received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after
    a thorough examination of the particular situation. © 2021 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the
    KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights
    reserved. Printed in the U.S.A. The KPMG name and logo are registered trademarks or trademarks of KPMG International. NDPPS 721526

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