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Digital Risk Management: Navigating the Challenges of Business Disruption and Technology Acceleration

In this rapidly changing world, technology is advancing at an unprecedented pace, leaving many businesses struggling to keep up. The last three years alone have seen a decade’s worth of change across various domains, from technology and business strategy to leadership, regulation, and the economy. However, as innovation continues to outpace the development of rules and governance controls, the need for effective digital risk management becomes more critical than ever.

Consider the way people communicate today compared to before the pandemic. Digital conversations now traverse multiple platforms like emails, Slack, WhatsApp, Teams, and texts, with memes, videos, slang, and emojis replacing traditional language. Simultaneously, business models and day-to-day operations are undergoing revolutionary transformations, with an increasing percentage of business transactions moving to digital platforms. Yet, many organizations still cling to outdated policies and processes that no longer align with the new digital landscape.

Shifting Norms and the Rise of Generative AI

The clash between technology and business is not new. Throughout history, social norms, jobs, and economic disruptions have pushed technology and business to adapt. However, the current wave of change is happening at an accelerated pace. One notable example is generative AI, often referred to as “humanity at superhuman speed.” This powerful technology brings both tremendous opportunities and potential risks. The CEO of OpenAI, the company behind ChatGPT, recently testified in front of Congress, advocating for AI regulation. Additionally, a group of AI experts has called for a more cautious approach to releasing certain AI tools into the marketplace.

Technology as the Fabric of Organizations

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In the past, technology primarily served as an enabler for businesses, such as during the early days of the internet and e-commerce. Today, technology has become an integral part of nearly every organization and industry. Data has emerged as the underlying force driving this transformation. The data universe continues to expand at an unprecedented rate, with organizations handling massive amounts of data in various formats. However, more than 70% of CIOs admit that the explosion of data surpasses human capacity to manage effectively.

Amidst this disruptive landscape, organizations must recondition their corporate culture and business strategies to keep pace with emerging risks and impending regulations. Digital risk management has become a top priority for leaders in this era of constant change. Fortunately, existing governance principles can be adapted to address the challenges of new technology, digital environments, and data sources.

Unlocking the Potential of Governance, Organizational Culture and Technology

Governance is often viewed as a burden or merely compliance-driven. However, it can be a powerful enabler. Strong and proactive governance empowers organizations to make informed decisions about data management. It helps identify what data to keep for leveraging business goals and what data to let go to minimize risk. By asking critical questions before, during, and after major projects or shifts in strategy, organizations can navigate the complexities of technology implementation while ensuring compliance, data protection, and ethical practices.

In addition to governance, organizational culture plays a vital role in adapting to the pace of change. Establishing a culture of governance that supports decision-makers and promotes desired behaviors is crucial. It influences policies, objectives, strategies, communication, and the mechanisms for rewarding and recognizing individuals. A strong culture of governance sets new standards within industries and fosters an environment conducive to innovation and resilience.

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Furthermore, technology itself can contribute to mitigating digital risks and enhancing resilience. Advanced analytics and visualizations can help identify bias in large datasets and algorithms, while AI applications can provide quality control and harm mitigation in AI systems. Monitoring technology and analytics can detect trends in digital risks, enabling leaders to address them before they escalate

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