Magazine

How Risk Models Are Failing in an Unpredictable System

Drawing on CeFPro’s Risk Outlook 2026 survey, this article explores how traditional risk models are becoming less effective in a world defined by uncertainty. Mark Norman highlights the shift from measurable financial risks toward complex, interconnected threats driven by technology, geopolitics, and systemic dependencies. These emerging risks often lack historical precedent, making them difficult to model using conventional approaches. As a result, institutions must rethink the role of risk management—moving away from prediction toward resilience, adaptability, and strategic insight. The article underscores the growing importance of managing uncertainty rather than relying solely on quantitative models.