Future of risk in the digital era. Transformative change. Disruptive risk.
Nine key trends shaping risk in the digital era
Digital technologies are ushering in a new era and driving transformative changes in every industry, as organisations adopt these technologies to redefine how they create, deliver and capture value. Identifying, understanding and addressing new risks associated with digital transformation will help businesses derive more value from their efforts in the future. What’s more, understanding how digital transformation can be applied to risk management will enable organisations to take a more balanced view of digital technologies as both a source of risk and a way to manage risk.
We’re witnessing massive investment in digital transformation across industries. This spending is driven by a proliferation of new digital technologies and a fear of disruption by tech-enabled competitors. Many organisations have been quick to not only update their technology infrastructures but also transform their operating models, customer engagement models, and even fundamental business models.
Organisations understand that digital transformation can capture new growth opportunities while heading off the threat of disruption. These same organisations soon learn that emerging technologies create new risks that they haven’t encountered before and also add complexity to existing risks. The interconnected nature of these risks creates a need to tackle them concurrently, rather than in isolation.
We see nine key trends shaping risk in the digital era:
Managing the black box of artificial intelligence
The use of artificial intelligence (AI) techniques and solutions for a wide range of novel use cases leaves organisations open to new AI risks.
Evolving governance and controls for automation
Operating environment changes driven by the adoption of automation technologies call for redefined governance mechanisms and operational controls.
Protecting against the changing cybersecurity risk landscape
In order for digital technologies to deliver on their immense promise, evolving cyber vulnerabilities and threats need to be addressed.
Combating weaponised misinformation
Large-scale spread of misinformation, enabled by advanced information manipulation tools and online platforms, is driving new types of information warfare.
Managing data risks for value creation
Data carries tremendous value for organisations while creating new challenges around transparency, accuracy, security, privacy, social expectations, and legal requirements.
Bolstering organisational resilience in the age of hyperconnectivity
Increased reliance on interconnected systems by organisations amplifies the impact of failure and threatens resilience.
Navigating regulatory change for emerging technologies
Regulatory changes focused on emerging technologies begin to affect business models and increase complexity of compliance.
Enabling digital transformation by managing culture risk
Misalignment between an organisation's goals for digital Transformation and employee values and behaviour creates new culture risks.
Owning digital responsibility and ethics
As part of their digital transformation efforts, organisations need to act responsibly and promote ethical use of technology.
Key Take-outs
Below are a few guiding principles:
- Make smart(er) risk management a part of digital transformation
- Plan for a digitally proficient workforce
- Digitally transform risk activities
- Revamp operations to manage risks from emerging technologies
- Build ecosystem partnerships to manage risks
If you would like to discuss these trends further, please get in touch with one our subject matter experts.
