Horizon scanning

Strategy - risk management - risk identification - opportunities.

Horizon scanning is a risk and opportunity management technique that explicitly increases the future time period over which evaluations are made.

In determining appropriate time horizons for review, horizon scanning considers both the speed at which future events may evolve, the rate at which information about them will become available ("risk clockspeed") and the potential adverse or favourable impact.

Horizon scanning includes:

• Examining broad range of information to identify potential threats, risks, opportunities and emerging issues.

• Exploring what the future might look like to understand uncertainties better, and to analyse whether the organisation is adequately prepared.

(Source - Institute of Risk Management)

Growing range of embedded payment solutions on horizon

"Also on the horizon is an evolution in terms of the range of solutions available, such as account-to-account payments using either QR codes or through a link that can be sent via email or by SMS.

In a nutshell, embedded payments will play a crucial role as the industry strives to make payments even quicker, simpler and safer."

The Treasurer - 2023 Issue 3 - p33.

Horizon scanning helps prepare better for the future

"Despite [efforts] throughout the ages, the future can never be accurately foretold.

In our modern world, our organisations turn to risk management... to divine the potential pitfalls and opportunities lurking in the mist of tomorrow.

In order to achieve such foresight, a number of tools and techniques have been developed over the years with which a skilled practitioner can attempt to reduce uncertainty. These tools include trend analysis to project the past into the future, scenario planning to understand the world given a particular set of parameters, and stress testing to better identifies the weak links within our systems.

However, it is horizon scanning which has become the buzz word of the modern organisation, and this document sets out to explain what horizon scanning means, how it fits in with the other tools in the risk manager’s toolbox, and how it can be practically employed to help organisations better prepare for the future."

Horizon Scanning: A Practitioner's Guide - Institute of Risk Management - p3.

Horizon scanning is not predicting the future

"Horizon scanning is a systematic method for spotting potential causes of uncertainty, ensuring adequate preparation, exploiting opportunities and surviving threats. It is NOT about predicting the future.

Horizon scanning supports the process of building organisational resilience and is one part of a suite of tools which can help practitioners understand and prepare for future risks...

No degree of investigation or planning will make up for [a lack of] real time availability of information...

... the long-term benefits of horizon scanning [include correcting for] missing out on [otherwise] unforeseen innovation [and over-rating] of standard knowable / understandable risks, [and] under-rating of complex and difficult to understand risks."

Horizon Scanning: A Practitioner's Guide - Institute of Risk Management - pp7-13.

See also

• Account-to-account
• Asset allocation
• Black swan
• Climate Financial Risk Forum
• Day trading
• Embedded payment
• Fat tail
• Guide to risk management
• Institute of Risk Management (IRM)
• Investment horizon
• Parameter
• Pillar 2 - banking supervision
• Pillar 2B
• Planning horizon
• Probability
• QR code
• Redundancy
• Reserve cash
• Resilience
• Risk
• Risk clockspeed
• Risk identification
• Risk manager
• Risk management
• Scenario planning
• SMS
• Stress test
• Time horizon
• Trend analysis

Other resource

Horizon Scanning: A Practitioner's Guide - Institute of Risk Management