Managing Digital Risks in the Modern Digital Economy

In the modern economy, advances in digital technology are creating rich success opportunities for organizations. Those same digital technology advances, however, are also generating new forms of digital risk.

For enterprises to pursue their ambitions while staying ahead of ever-evolving cyber threats and threat actors, managing digital risks is essential. Hence digital risk management is so important today.

By understanding and managing digital risks, companies can protect their assets and data from cyber-attacks, navigate their digital transformation confidently, and improve business decision-making.

What Is Digital Risk?

To thrive amid various challenges in this new business landscape, organizations must articulate new strategic initiatives to improve operational efficiency, enhance the customer experience, and most importantly, address digital risks.

Digital risk refers to the unexpected — and usually unwanted — outcomes resulting from the adoption of new technologies such as robotic process automation (RPA), artificial intelligence, the Internet of Things, and Big Data.

Common Types of Digital Risks

Effective digital risk management includes business processes to understand, manage, prevent and mitigate various digital risks. The most common digital risks are discussed below.

Cybersecurity Risk

Cyber risk is among the top worries for most CISOs; 66 percent believe that their organizations are not prepared to cope with cyber attacks. Broadly speaking the threat arises from an expanding attack surface, which increases the chance of r attacks that can harm business continuity and block the organization from meeting its goals.

Workforce Risk

The dynamic nature of today’s workforce and the gig economy are creating new workforce risks such as skill shortages and high employee turnover.

Compliance Risk

When companies adopt new technologies, they often have to contend with new compliance requirements around data retention, privacy, and operational controls. A failure to adhere to these rules exposes them to risks such as loss of customer trust, financial forfeitures, and legal penalties.

Third-party Risk

These “inherited” risks are increasingly in the spotlight following several high-profile supply chain cyber attacks in the recent past. Third-party risk makes organizations vulnerable to intellectual property theft, data breaches, and disruptions to business operations.

Automation Risk

Automation technologies such as RPA do improve efficiency and productivity, and lower costs. They also, however, create risks around implementation complexity, compatibility with legacy systems, employee pushback, and change management.

Resiliency Risk

Resiliency risk affects organizations’ ability to return to normal operations after a disruptive event (weather disaster, terrorism, cybersecurity failure, and so forth).

Data Privacy Risk

Data privacy risks relate to organizations’ ability to protect data and keep that data safe from threat actors.

Best Practices for Digital Risk Management

Managing digital risks requires risk management and security teams to work together to improve visibility into the risk landscape, design an effective incident response plan, and take timely and appropriate action.

The digital risk management best practices outlined below can help reduce your digital risks. These best practices can apply to organizations in every sector, including healthcare, financial services, retail, energy, and more.

Identify Business-Critical Assets

Proper digital risk management starts with identifying all critical assets and sensitive data, and how those things may be compromised by threat actors. These assets include people; systems such as portals, databases, websites; and applications like ERP or CRM platforms and other software.

Once you identify your critical assets, organizations can get a better handle on potential exposure areas and implement robust risk mitigation strategies.

Understand Potential Threats

To understand digital risk it’s vital to first recognize potential threats, their possible impact, and the probability of occurrence. For this, the organization must:

• Understand the threat’s behavior through attacker tactics, techniques, and procedures (TTPs);
• Identify attackers’ opportunities to leverage the threat.

Most adversaries target the easiest route to perpetrate cyber attacks. For instance, they leverage stolen credentials to access enterprise systems, take advantage of employees’ social media footprint, or impersonate the brand to launch phishing attacks. Knowing these facts can prepare the organization for threats and minimize its digital risk.

Implement a Strategy for Governance, Risk, and Compliance (GRC)

A robust GRC strategy provides an integrated approach to digital risk management that lets the firm manage risks, meet compliance requirements, and assure that IT operations remain aligned with business objectives. It also improves enterprise-wide communication and decision-making and creates a culture of trust.

Reduce the Size of the Attack Surface

As the organization’s digital infrastructure grows, adversaries have more places to probe for, and take advantage of, weaknesses. So it’s imperative to improve visibility into that attack surface, and to reduce the attack surface size by monitoring infrastructure and addressing any open vulnerabilities in software code, documents, customer data, credentials, and so forth.

Create Strategic and Tactical Risk Mitigation Plans

For effective digital risk management, organizations must identify the strategic, tactical, and operational actions relevant to their business context.

On the strategic front, they must:

• Update threat models with all critical digital assets;
• Establish key risk indicators (KRIs) and risk tolerance levels;
• Establish key performance indicators (KPIs) to measure results; and
• Monitor KPIs and KRIs to mitigate risks.

Tactical risk mitigation focuses on the here and now and should include aspects like:

• Protecting critical information assets from cyber threats;
• Fixing security gaps in vulnerable systems; and
• Conducting regular penetration testing to get an “attacker’s eye view” of the attack surface.

Keep Track of Emerging Digital Risks With ZenGRC

Digital risk management hinges on a unified approach, enhanced visibility, and coordinated actions. In addition, to protect their digital future, organizations are well-served by investing in integrated risk management platforms like ZenGRC.

ZenGRC provides all the capabilities modern organizations need to identify, quantify, manage and mitigate digital risks. A single integrated experience reveals risk across the enterprise so firms can quickly reduce their exposure and protect the business, even from advanced threats.

Click here for a free demo of the ZenGRC platform for operationalized digital risk management, monitoring, and mitigation.