Embrace Risk in Your Digital Business Transformation Journey
Organizations of all size and scope are introducing digitalization into their business models because of customer, market, competitive, workforce and security requirements. While executives see digitalization as an area of growth, this universe of growth activities also has a parallel universe called the digital risk universe – and these emerging, technical risks require a different approach.
Digital risk management refers to identifying, assessing, evaluating, monitoring and mitigating risks associated with the use of emerging or disruptive technology, such as IoT, big data, cloud, mobile, AI and others. In the past, digital risks, like security, have been handled as technical issues by IT teams. However, because of the merging of IT and business growth and consequent risk, digital risk management must become a practical approach to managing digital risk from a business perspective. Digital risk management must enable organizations to focus on these technical issues but prioritize them from the view point of their business and what has the most financial impact, strategic impacts, reputational damage and more. This quantification of digital risk provides a foundation for managing risk across disparate business functions.
Emerging risks from this digital transformation have shined a spotlight on three increasingly intertwined business challenges: modernization, malice and mandates. These challenges are intensifying for companies pursuing digital initiatives, as pressure to innovate and grow generates new complexities and risks that organizations must manage.
Risk, security and audit groups are challenged in dealing with digital risks, including not having the skills sets, agility or level of integration to adequately evaluate, manage and mitigate these risks because digital risk management is often a very immature capability within most companies. Digital transformation has blurred the boundary between cybersecurity and risk management, yet many companies’ security and risk functions continue to run independently. Internal audit is challenged specifically because these emerging digital risks are very technical, they may not fall within the traditional areas to be included in internal audit’s scope or the executive team wants audit to steer clear since it’s all so new.
This session will discuss these and other challenges the second and third lines of defense face today. We will also discuss the importance of maturing current governance, risk and compliance capabilities to a more integrated approach, and incorporating better digital risk management into their processes so these emerging risks can be dealt with.