In today’s digital world, organisations and consumers are becoming increasingly reliant on technology which naturally comes with an increase in Digital Risk.
However, by putting processes in place to identify and mitigate these risks, organisations can continue to benefit from digital advances while mitigating the associated risk.
This article will look into what Digital Risk is, the various types of digital risks and how it can be managed.
What is Digital Risk?
Digital Risk is the unintended consequence faced by adopting new technologies. Various types of Digital Risk exist and by identifying them, a strategic risk mitigation plan can be developed to address the respective risks.
The types of Digital Risk include:
- Cybersecurity Risk: the loss of sensitive information and the potential use of it against an organisation, resulting in adverse impacts.
- Data leaks: risk associated with a breach of organisational data.
- Workforce Risk: risk associated with a talent shortage.
- Compliance Risk: risks associated with failing to adhere to certain rules when it comes to the implementation of a new technology.
- Process Automation Risk: risks linked to the implementation of automation on processes.
- Third-party risk: risks associated with outsourcing business processes and can include any of the typical Digital Risks.
- Data Security: risks associated with the protection of personal information which is often sought after by hackers.
It is important for organisations to protect themselves against these Digital Risks through proactive Digital Risk Management. This can be defined as the process of identifying, assessing and mitigating these risks and can be done through a formal process that consists of 5 steps, namely:
Identify
The process begins by identifying all digital assets and recording this in a digital footprint. Particularly important are those assets exposed to potential unauthorised access as these could potentially expose the business.
Assess
Next up is to assess the assets captured in the digital footprint and conduct a risk analysis to assess what the likelihood is of them occurring.
Respond
Have a response plan in place as a proactive approach to dealing with risks if they do prevail.
Prevent
Prevent the same risk from recurring by implementing various preventative controls and measures.
Monitor
Embed a continuous review process across the organisation to ensure you are aware of any digital threat advances.
Digital Risk Management forms an essential part of overall Business Management and allows organisations to identify potential risks and mitigate them in order to protect themselves from digital threats.
Cubility is a management and technology consultancy in Perth that works with businesses to solve operational problems and we specialise in helping clients to reduce their Digital Risks. If your business needs any assistance with this, please contact us. We would love to hear from you.
