The evolving risk landscape of the digital world means businesses need to foresee dangers they may not have ever experienced before. With the use of digital technology, businesses face new threats and require new risk management strategies.
While knowing what to focus on first can be daunting, identifying potential uses of emerging technology to better address risks is a major part of the solution.
Manage risks relating to new business models
Many organizations have not only updated their technology infrastructures but transformed their fundamental business models. The rise of new business models is leading to new types of risks. For example, businesses that use digital channels face more exposure and risk to digital assets.
Many businesses are using AI techniques and solutions to approve loans, identify fraudulent transactions, and perform surveillance. Digital technologies are a source of risk but they also provide ways to manage risks.
The ID Analyzer platform provides global identity verification solutions for businesses, organizations, and individuals, such as driver license verification. Investing in digital technologies to manage certain risks can increase effectiveness and even make some risks irrelevant.
Design operational controls to control automation risks
Automation is becoming the new norm for organizations to support their growth and cost optimization strategies. Legacy infrastructure and fragmented operating environments are limiting optimization.
Hackers may gain access to an automated system or acquire confidential data through bots with excessive privileges and access. Different types of automation require different controls and outdated controls need replacing.
Organizations need to adopt a holistic change management approach to fully realize the advantages of automation and design new controls specific to the risks that come from using automation technologies.
Address cyber vulnerability and threats
Cyberattacks have moved beyond identity theft and online account hacks. New types of malware, like automated phishing tools, are expanding cyber risks. There is greater difficulty in identifying intelligent malware as it can mimic normal human behavior to avoid detection.
The Internet of Things and cloud computing facilitate attacks but they can also defend against them in ways never imagined before. Organizations must keep revisiting their cybersecurity measures and create a culture of security awareness.
Manage data risks for value creation
The digital economy uses data as its fuel. Data provides great opportunities for organizations if they can collect, store and analyze it to receive business insights. However, this poses new challenges around accuracy, transparency, privacy, legal requirements and social expectations. New regulations are being put in place by various regulators to help minimize these risks.
Sharing customer data without the consent of customers can result in legal, regulatory and reputational consequences. Customers want the right to access their data, limit its use and delete it.
Organizations need to treat data as a valuable asset and identify the risks as well as the opportunities associated with it. They need to conduct risk assessments and institute AI-enabled controls and use advanced surveillance methods to identify and mitigate risks.
Minimize risks from interconnected systems
Increased reliance on interconnected systems by organizations increases the impact of any error and can affect their resilience. Moving critical infrastructure and processes to the cloud, using sensors to enhance operational awareness, and increasing touchpoints with the external ecosystem all increase complexity and exposure to unforeseen risks. A single error can spread rapidly through interconnected systems.
Organizations need to monitor risks using digital assessment tools so they can detect issues before they escalate. They need to design for resilience and real-time automatic recovery. Simulating failures can help them to determine resiliency and practicing incident response and recovery can allow for the appropriate handling of disruptive incidents.