A type of risk redistribution that aims to mitigate risk, not only by risk management departments (functional level) but also as part of collective efforts (firm-level) at all levels and across all sections/ units, etc. Additionally, and importantly, developing competitive advantages is part and parcel of the entire process of transformation. Simply put, risk transformation involves both risk mitigation techniques and creation of adaptive and competitive solutions, internally and externally.
Risk transformation, though a transformative approach, is key to address strategic risks. In this context, risk transformation is all about developing an integrated and strategic response to evolution in the broader operating environment, including challenges posed by regulations and competitive forces. A strategy, per se, is based on a set of assumptions and is associated with certain risks. Analyzing these assumptions and risks is essential and should be an integral part of any strategic planning process.
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