New tools and tech – artificial intelligence, automation, social platforms and more – promise to add more convenience to daily tasks, or make our businesses run faster and smarter than ever before. Yet the same tech that brings new opportunity also creates new risks. As companies continue to go digital, managing threats inherent with this transformation becomes critical.
Digital risks look different for every organization. For some, such as manufacturing companies, the opportunity of automating key business process can lead to layoffs and the corresponding operational risks of downsizing. Others, like the publishing industry, have faced strategic risks as the balance has shifted to digital and away from print. Regardless of the industry, the most common and inherent digital risk every organization face is security.
WhatsApp: A recent case in digital risk management
WhatsApp, the cross-platform social messaging app, was recently hacked by an Israel-based cybersecurity company that installed malware by calling users’ phones to tap calls and monitor user activity. Although these types of attacks are rare – and this vulnerability was quickly fixed – the risk event is a reminder that regardless of how robust security measures are, if you are connected to a network, you are at risk. Having a proactive plan to address digital threats ahead of an event is crucial.
Digital risk isn’t just a technology issue; it’s a business concern. For WhatsApp, whose market leadership was built on the perceived privacy and security of the app’s end-to-end encryption messaging, the security vulnerability put its reputation on the line. Thankfully, the engineering and security teams were able to patch and update the system quickly. If they hadn’t, the incident could have easily manifested itself a situation that negatively impacted both the reputation and bottom line of the company.
As companies increasingly lean on technology, digital risk continues to evolve and becomes more pervasive. But with the right approach, businesses can protect themselves from digital risk – and focus on the opportunities that digitization has to offer.
Risk management shouldn’t be an afterthought.
To fully prepare for the digital 2020s, integrated risk management needs to be sewn into the fabric of the entire organization. Integrated risk management gives managers a clear view of both operational and strategic risks by taking risk factors across the entire business into consideration. Without this visibility at the start, it’s impossible to know what threats could be waiting when bringing a new technology to market, or where an organization could be vulnerable when adopting a new internal technology. An integrated view of risk makes all the difference in protecting and limiting the impact of every possible digital threat.
We’re approaching a new decade, and what digital risk looks like even 3-5 years from now could be wildly different from what is top of mind for risk managers today. The basic principle, however, remains the same: proactive risk planning early on in the process can be the make-or-break difference.