There is a Need to Shift to Manage Overall Risk
Starting Point: Recognize New Risks at a New Pace
GRC emerged as a way of improving corporate governance and internal controls to address regulatory compliance requirements. Today, however, the need has shifted from managing compliance risk to better managing overall risk. As the definition and scope of risk itself has evolved, the pace of risk has increased as well. With expansion of digital products and services, increased reliance on third party ecosystems supporting business operations and constantly evolving compliance and industry pressures, organizations face a litany of risk moving to the forefront. Strategies that drive business success today, such as technology adoption or market expansion, are creating new opportunities—but at the same time, they are introducing more risk.
Digital transformation is clearly a strategic priority today. 2020 has proven the need for technology services and has accelerated the push towards digital transformation. Digital transformation creates new opportunities to thrive and compete—but it also creates digital risk. Digital business typically involves fastmoving projects supported by processes that require a multitude of different applications, expanding the points of risk and the stakes for the organization. The key to seizing the opportunities is managing the risk in critical areas as the business pushes the technology envelope.
Vendor and Other Third-party Relationships
Looking to move more quickly and nimbly to exploit business opportunities, organizations are increasingly relying on external parties, such as service providers. However, they can struggle to efficiently manage and govern these third parties because traditional methods aren’t scalable. Third-party relationships introduce unpredictable, inherited risks that can lead to surprises and potential losses. In
addition, regulators are establishing increasingly higher standards of accountability for the oversight of third-party relationships.
Data Governance and Privacy
Organizations are creating more data on a daily basis than ever before. The ambitious initiatives of digital transformations create a tremendous challenge not only in the scale and scope of data but also in understanding the value of different types of data and the protection requirements necessary to manage risk to the data. The fundamental challenge regarding risk during this the data explosion is determining:
What the value of the data is.
Where the data is flowing.
What needs to be done to properly protect the data.
A core tenet of risk management is you can’t protect what you don’t know about. The complex data flows within a modern enterprise strains any processes designed to understand data protection requirements. Any inefficiency in the strategy to identify, assess and treat risks to data will be quickly overwhelmed under the avalanche of data.
These examples represent major categories of risk for organizations today, but they are by no means the only risks organizations face. Every organization is a complex ecosystem of people, processes and technology, and risk can be hidden away in many areas.