Digital risks continue to increase in importance
- Details
- Published: Friday, 17 February 2023 13:21
FTI Consulting, Inc., has announced findings from a study of digital insights and risk management trends, which show that digital risks are rapidly surpassing other areas of corporate risk as the primary business concern.
Based on a survey of senior-level and C-suite executives around the world and supplemental one-on-one interviews between analyst Brad Blickstein and senior leaders at large corporations, the report, The Most Valuable, Vulnerable Commodity: Data Establishes a New Era of Digital Insights & Risk Management, provides a close examination of how organizations around the globe are ‘responding to, managing and leveraging the modern data paradox’.
When asked about how they expect the level of risk and activity to change across key digital risk categories, including privacy, information security, the expanding data footprint, disputes, investigations, regulatory compliance and more, 63 percent of respondents indicated that operational and/or compliance implications will increase across every area. Many believe both operational and compliance risk will increase, especially in data privacy, security, breaches, and data quality, given tightening regulatory enforcement.
Key study insights include:
Top risk concerns
- More than two-thirds of respondents ranked data privacy as one of their top three concerns.
- Additional risk areas that ranked as a top-three issue included information security and data breaches (59 percent), data quality (37 percent) and regulatory compliance and inquiries (25 percent).
- 90 percent of data privacy professionals have experienced increased data-related risk due to hybrid work environments.
- 77 percent of data privacy professionals said data breaches have become more expensive in the last year.
- 76 percent experienced a significant or moderate increase in regulatory activity over the past year.
- Only 26 percent reported that they had a fully proactive approach to monitoring compliance risks; however, 75 percent of risk and compliance professionals are regularly or occasionally using AI to conduct proactive compliance monitoring, IP remediation and other risk management activities
Information governance challenges
- 41 percent of respondents stated that data is being shared on devices and through systems that are not sanctioned or covered within the organization’s policies.
- More than 70 percent of respondents with information governance responsibilities said the cost of maintaining strong information governance has grown more expensive over the last year.
- 76 percent of information governance decision makers reported that the increased use of collaboration tools and cloud-based applications has created significant or moderate information governance challenges (one-third indicated ’significant’).
Dynamic data and emerging data sources
- 85 percent said the rising variety and volume of data types are driving increased cost or risk, with one-third of those saying the increases have been ‘significant’.
- For more than half, the complexity of data sources — and the cost and effort associated with accessing, collecting and producing data for disputes and investigations — has increased.
- 66 percent of chief legal, compliance and risk respondents plan to invest in technology to address risks from emerging data sources.
Impacts of advanced technology
- Only 6 percent are not considering any blockchain and digital assets solutions.
- 44 percent are considering blockchain technologies for supply chain issues, while another 38 percent are considering them for payments and transactions.
- Most respondents are not taking meaningful steps to prepare for the risks associated with blockchain and digital assets; yet 78 percent said that they are concerned about volatility, regulation and other related risks.
- 91 percent of chief technology officers and chief financial officers agree that risk management related to blockchain and digital assets requires highly technical expertise.
