Digital Risk: The Fast-evolving Factor

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For management leaders today, there is an accumulating interest from non-technical individuals – from the employees to the legal team including the board – in the open-ended question “are we protected.” The challenge is that any technical leader understands that it is not a simplistic answer, particularly in today’s business climate. The primary issue that information leaders must master the knowledge that for the enterprise to live on, their position must develop. We have checked before the rise of uncertainty quantification in other specialties, from insurance to ship trading. Nevertheless, the difficulty facing modern CISO and CIO is quantifying opportunities that have yet to be estimated – digital risks.

As experts have analyzed, the role of information leader has developed rapidly over the last few years. Technological modifications and the resulting impression on people and method within an organization have encouraged organizations to depend more and more on the data accumulated by their information teams. Gartner pronounces that By 2022, 90 percent of corporate policies will explicitly consider data as a critical business asset and analytics as a quintessential competency. The inner perspicacity being, that key leader must start to see themselves as asset managers in the identical way that the CFO and COO do – data has converted into the new currency. As a consequence, information leaders are being maintained to the same standards as their equals in regards to summarizing on their progress and processes. To adequately communicate to the Board and CEO, information leaders must be able to converse the same language as their equivalents – the word of danger.

Organizational leaders are accustomed to measuring risk and make declarations from that data. The fundamental forms of risk that leaders face fall into three classifications:

Operational risk: The dangers connected with failure in people, method, and systems.

Financial risk: The risk of economic failure or gain as a result of a collapsed investment

Strategic risk: The risks most appropriate to the executive team, strategic risk is the impression that decision making has on the business.

To date, these patterns of risk have described all facets of a business – the workforce and process to present value, the strategy controlling where the organization is proceeding, and the cash to support it all. Now we are in a new epoch of business, though, with a new section to account for – the selection of cloud technology, the penetration of artificial intelligence, and the ever-increasing dependence on data has produced a further need to measure these digital risks in the same circumstances as the original three.

Is digital risk a fourth canister?

The difficulty for even experienced actuaries is the acknowledgment that digital risks are not restricted to one aspect of the business anymore – marketing teams are using consumer and market data to create custom campaigns, operations units are executing IoT technology, and AI is leading strategy decisions at a breakneck rate. Which raises the question – is digital risk its bucket? Or does it need to be regulated as a lateral aspect of the entire organization?

According to Raphael Yahalom, MIT researcher and CyberSaint advisor, he takes on the topic with a different perspective and outlook. Quantifying digital risk is not as manageable because we don’t have the data yet to calculate in the same way that we have with other forms of uncertainty. Further, digital risk combines styles of risk that have been left vague to date – reputational risk, for example: a glimpse at headlines in 2018 (and even with the TurboTax breach in current weeks) will display the catastrophic destruction that a cyber event such as a data infringement can have on an organization’s reliability and even their bottom line.

Digital risk itself symbolizes a new configuration of impressions to the business and, as a consequence, demands new methodologies to evaluate those risks. However, digital risk must be communicated in the same style as the other three sections to be favorably understood by other members of the administrative group.