In my opinion, the greatest risk facing business today is information security risk.
Information Technology (IT) has been developing at such a fast rate that regulation has not been able to efficiently keep up with it. This is pressing to risk management since we are moving into a more automated world where information is widely shared. This network of information has become a machine encompassing a diversity of data. Although there are safeguards in place to protect this data, we have seen in recent times that even the most secured data can be compromised.
To that end, even though there are frameworks from ISACA and NIST, there is no ultimate authority that governs how an organization must communicate data breaches.
How would we fare in such a situation?
Will senior management of corporations and the government be able to fix things just like they tried during the sub-prime mortgage crisis? I am convinced the risk of cyber attacks appears less of a concern to regulators who often appear uninformed (and sometimes uninterested!) on the intricacies of rising technologies. Anyone can easily see this by watching Google CEO Sundar Pinchai or Facebook CEO Mark Zuckerberg painfully try to explain how their services work when they testified against the government.
Furthermore, in the case of corporations, will senior management be able to wholeheartedly ensure that IT risk is adequately managed and aligned with the company’s greater strategic goals? I believe it is an interesting question to ask considering that senior citizens usually hold the most senior management roles and they are not as well-versed in digital information as the younger generation. In this respect, I believe the amount of asymmetric information risk will interact with the rise of IT developments. How will younger management be able to coordinate fast developments and effectively communicate that to those at the top?
My proposed remedy would be to create agencies that focus on specific IT services just like how there agencies that focus on specific financial services. I would also suggest global IT security committees for publicly traded firms whose infrastructure covers data from different regions. We can also play devil’s advocate, and perhaps use the rise of IT to inspire new solutions. Thought leaders of automation have suggested the utility of artificial intelligence software that could self-regulate IT.
In an era where information and technology are becoming increasingly integrated, we must also prepare for new cyber related issues ahead. When one considers the increasing development of financial-tech trends such as Venmo and Bitcoin currency, along with the rise of artificial intelligence in the globalized world, there are to be new challenges on the horizon.
What do you think is a great risk facing business today? What obstacles do you think are to be expected? How will you adapt your talents and acumen to match these challenges?
The opinions expressed in this article are the author's own.
Paul Sebastian is a Certified Fraud Examiner (CFE) and compliance professional with a particular interest in cryptocurrency. He has advised clients for consulting firms such as PwC and Ernst & Young. He currently holds a Bachelor's in Finance from the University of Central Florida, and is currently pursuing an MBA at the University of South Florida - with a concentration in Cybersecurity. Paul Sebastian intends to use his skills and experience to eventually start his own firm and become an independent consultant. To that end, on his free time he enjoys lifting weights, cooking, reading, and hanging out with his family.
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