An analysis of the most pressing concerns based on insights from 1,000 UK business leaders.
Author: Neil Hodgson
Financial pressures continued to shape the risk landscape in 2024, and look set to continue in 2025 as inflation, interest rates, and geopolitical uncertainties impact the immediate economic outlook.
Supply chain disruption is likely to remain a challenge, with extreme weather and geopolitical risks as common drivers.
Risk management continues to rise up the agenda
The threat landscape of the past five years has seen more attention of risk management at a senior boardroom level. Risk and insurance managers have an elevated role and we’re seeing companies invest more in loss prevention tools and frameworks.
Getting closer to the risks inside and outside the business is helping firms navigate a more complex trading environment and be better placed to seize opportunities that may arise.
Disruptions are more common, severe, and harder to predict in today’s environment, leading to a significant increase in firms refining their business continuity strategies. The trend underscores a
We've seen approximately a 50% increase in clients’ focus on business continuity planning. The resilience aspect of organisations has significantly improved this year.
New building safety rules a key focus
The lasting impact of the Grenfell review will continue to become clear, with far-reaching implications for the built environment. Prime Minister Keir Starmer has pledged to deliver “a generational shift” in the safety and quality of housing.
As a result, evolving health and safety regulations will place additional obligations to uphold building fire safety regulations and safeguard their financial positions.
Fire safety will be a major concern in the upcoming years with people coming to understand the significant effects of the Grenfell review.
Further, the regulatory environment for 2025 requires companies to transcend basic compliance and instill a cultural shift that prioritises ethical practices and safety.
With more stringent regulations that include aspects of workplace safety, harassment prevention, and equality standards, businesses need to embed these mandates deeply within their operational DNA.
This approach requires proactive leadership that communicates the importance of compliance as a shared value rather than an imposed obligation. Leadership must ensure that new practices are adopted at all levels of the organisation and sustained over time.
AI-related risks as cyber threats remain
The rise in ransomware attacks and data breaches continue to pose significant threats to business operations. Half of UK businesses reported experiencing some form of cybersecurity breach or attack over the previous 12 months, with phishing the most common attack, affecting 84% of businesses1.
Evaluating and strengthening supply chain security will remain critical from a cybersecurity perspective, as dependencies on third-party providers continue to grow.
Digital transformation is meanwhile bringing new and emerging risks to the forefront. Risk managers are taking on an integral role as AI is further embedded into the workplace.
Among the key risks associated with the technology include failure to invest in AI tools, mismanagement, and over-reliance without proper verification.
AI compliance requirements are growing as regulators race to catch up. The EU has taken a centralised approach through the Artificial Intelligence Act, while the UK government is proposing a more decentralised approach.
Clear guardrails will remain an essential aspect of AI integration moving forward.
Strategic approach needed for long-term growth
In 2025, businesses will need to focus on diversifying revenue streams and building long-term resilience against both anticipated and unforeseen challenges.
Viewing risk management as a continuous and evolving process can help companies protect against short-term disruptions while also laying the groundwork for sustained growth. This ensures that businesses remain agile and competitive and able to adapt to changing circumstances.
There is a strong case for viewing risks as opportunities for strategic advantage. This shift in perspective allows businesses to position themselves for growth, even amid adversity. It's important to remember that with every risk comes an opportunity, and that's what all businesses should be concentrating on.
