Module 26: Management of Emerging Risk

Known risks can be managed.
Emerging risks must be anticipated.

Emerging risk refers to:

• New risks
• Rapidly evolving risks
• Previously unidentified risks
• Risks with increasing velocity or impact

CRISC expects structured anticipation — not reactive firefighting.

What the exam is really testing

When emerging risk appears, CRISC is asking:

• Is environmental change being monitored?
• Is risk reassessed proactively?
• Is the threat landscape reviewed?
• Are new technologies evaluated?
• Is governance adaptable?

Emerging risk management is about awareness and structured reassessment.

What is an emerging risk?

Emerging risks typically involve:

• New technologies (AI, cloud, IoT)
• Regulatory changes
• Geopolitical instability
• Industry shifts
• New business models
• Evolving threat actor capabilities
• Supply chain transformation

They may not yet have:

• Historical loss data
• Mature controls
• Clear probability estimates

Uncertainty is higher.

Why emerging risks are difficult

Emerging risks often involve:

• Limited data
• High uncertainty
• Fast-moving threat landscape
• Regulatory ambiguity
• Organizational blind spots

CRISC does not expect perfect prediction.

It expects structured monitoring and reassessment.

Governance responsibilities

Management of emerging risk requires:

• Environmental scanning
• Industry intelligence monitoring
• Regulatory tracking
• Technology risk assessment
• Cross-functional risk discussion
• Periodic reassessment of risk register
• Escalation when exposure changes

Ignoring environmental change is a governance failure.

Threat landscape connection

Emerging risk is closely tied to:

• Threat modeling
• Risk scenario updates
• BIA reassessment
• Control effectiveness evaluation

If the threat landscape shifts, risk scenarios must be updated.

Static risk registers signal low maturity.

The most common exam mistakes

Candidates often assume:

• Emerging risk must be mitigated immediately.
• Lack of historical data prevents assessment.
• Only IT identifies emerging risk.
• Existing controls automatically cover new risks.

CRISC prefers structured evaluation before reaction.

Example scenario (walk through it)

Scenario:
An organization plans to deploy AI-powered automation tools. Regulatory guidance for AI governance is evolving and unclear.

What is the MOST appropriate first action?

A. Delay implementation indefinitely
B. Deploy AI tools immediately
C. Conduct structured risk assessment and monitor regulatory developments
D. Transfer risk through insurance

Correct answer:

C. Conduct structured risk assessment and monitor regulatory developments

Emerging risk requires structured evaluation and monitoring.

Slightly harder scenario

Industry intelligence indicates increasing nation-state cyber activity targeting critical infrastructure. The organization operates in this sector but has not reassessed its threat models in three years.

What governance weakness exists?

A. Weak inherent risk
B. Failure to reassess emerging threat landscape
C. Excessive risk appetite
D. Poor BIA

Correct answer:

B. Failure to reassess emerging threat landscape

Emerging threat changes require periodic reassessment.

Emerging risk vs known risk

Known risk:

• Historical data available
• Controls established
• Probability estimable

Emerging risk:

• Uncertain probability
• Limited data
• Evolving exposure
• Increasing velocity

Management must avoid ignoring risks simply because they are difficult to quantify.

Monitoring mechanisms

Organizations should leverage:

• Industry threat reports
• Regulatory bulletins
• Vendor risk updates
• Strategic planning reviews
• Risk workshops
• Scenario analysis

Emerging risk is proactive — not reactive.

Risk register integration

Emerging risks should:

• Be documented
• Be evaluated qualitatively if necessary
• Be tracked for trend movement
• Be reviewed periodically
• Be escalated if impact grows

If emerging risks are discussed but not documented, governance discipline is weak.

Slightly uncomfortable scenario

A risk manager identifies a new geopolitical risk affecting supply chain stability. Leadership dismisses it because no disruption has yet occurred.

What is the MOST significant governance concern?

A. Excessive mitigation
B. Failure to proactively evaluate emerging exposure
C. High inherent risk
D. Poor threat modeling

Correct answer:

B. Failure to proactively evaluate emerging exposure

Emerging risk requires anticipatory evaluation — not reactive response.

Quick knowledge check

1) Emerging risk is characterized primarily by:

A. High historical loss frequency
B. Regulatory certainty
C. Increased uncertainty and evolving exposure
D. Fully documented controls

2) What is MOST appropriate when a new technology introduces uncertain exposure?

A. Immediate avoidance
B. Ignore until loss occurs
C. Structured risk assessment and monitoring
D. Automatic mitigation

3) Failure to update risk scenarios when the threat landscape changes indicates:

A. Strong ERM
B. Governance complacency
C. Effective mitigation
D. Proper aggregation

Final takeaway

Emerging risk management requires:

• Environmental awareness
• Structured reassessment
• Scenario updates
• Risk register integration
• Governance-level visibility
• Escalation when exposure grows

CRISC rewards forward-looking governance thinking.

Reactive management is insufficient.