Rise in Digital Risks Call for a Smarter Approach to Risk Management

With digital interactions at an all-time high, the likelihood of digital risks has only increased. Here, Matt Kunkel, CEO of LogicGate, addresses what companies should keep in mind as they invest in digital risk management to secure their data and information. 

The shift to remote work created a unique space for risk. Threats such as phishing have gone up exponentially as employees connect remotely rather than through a physical office’s secure network. 

With digital interactions at an all-time high, the likelihood of digital risks has increased significantly. Digital risk becomes more problematic the more businesses rely on outside services, and companies must collaborate and invest in digital risk management to more readily secure their data and information.

Identifying Digital Risk

Right now, 61% of directorsOpens a new window are enhancing their digital business operations. This includes more than remote work—social media, cloud storage, AI, and new software that lives online all contribute to new forms of digital business. New technologies pose new challenges, and in a time where a majority of businesses are still online-only, there is a need for more comprehensive digital risk management that understands the scale and severity of online threats. Many of these risks aren’t new—in fact, most companies already have existing frameworks that cover digital threats such as third-party and cybersecurity risk management. 

The big problem is the scale on which risk managers can implement these when they become the primary risks. The healthcare industry, for example, has seen unprecedented spikes in data breaches during the COVID-19 pandemic due to increased reliance on new services originating outside of their organization. Businesses have increased their social media budget by up to 74%Opens a new window to market during the pandemic, relying on third-party vendors. Though the risks have existed in the past, the digital transformation of many businesses has accelerated the need for a properly funded digital risk management team that understands where to allocate resources and how to combat risks associated with using third-party vendors and services.

Managing Risk During Digital Transformation

The first major step any business can take in prioritizing risk is to invest in it. Digital risk management is a company-wide, top-down effort that involves executives as much as employees. Risk leaders must come together and decide how they want to create their own risk culture. With more time and money, risk managers can lead seminars and web lessons on the basics such as phishing emails while identifying other dangers to avoid when using new services and programs. Giving employees the necessary advice on avoiding risk will lead to a culture of self-sufficiency and accountability. With almost every employee able to identify risk and bring it up to risk managers, chances of a breach or successful scam are heavily mitigated. 

An educated organization leads to a risk-aware culture. Future digital endeavors will not only be safer but will show your organization’s ability to identify and counter digital threatsOpens a new window . This will garner better customer satisfaction and open the doors to more secure clients that wouldn’t trust businesses with a history of risk mishaps. To help create a solid risk culture, organizations must be prepared to change, whether that means new software, more security measures, or automation. As long as risk leaders communicate and emphasize the importance of a newer, safer culture, executives and employees alike can educate themselves on emerging risks in the digital world.

Risk Moving Forward

Even as offices reopen and businesses return to regular operations, digital risk will remain a threat. So many new software and programs that were essential for remote work will still be used well into the future—with many more to come. Advancing technologies have given a new perspective on how organizations achieve their goals and manage operations. Risk managers need to be prepared, using their expertise to influence important decisions at all levels. 

Instead of being entirely reactive in the new digital work environment, organizations can proactively find new best practices for customer engagement, data storing, and company growth.

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