For the last two years, business leaders have been in constant firefighting mode, responding to issues created by the Covid-19 pandemic. From density restrictions to lockdowns, natural disasters and cyber-attacks, organisations have continually pivoted to manage supply chains issues, staff shortages, and closed borders. This continual shifting of priorities has left little room for identifying risks and managing risk rigorously and effectively.
As Australia begins to shift towards living with Covid and businesses return to something approaching normal in 2022, there is a need to revisit risk assessment and our approach to managing and mitigating business risks. Creating better ways to deal with governance concerns, compliance, and security risks will be top of the list, to ensure future events aren’t likely to blindside companies.
What is risk management?
A quick overview of risk management. This is a process through which your organisation identifies, assesses, and plans for risks that have great potential to affect your business operations and continuity.
Risks can be internal or external. External risk factors are those such as natural disasters or pandemics, political upheavals, or market changes. These are outside the influence and control of the board of directors or senior management of a company. Internal risks are those that come from within a company, such as changes to staff working arrangements or neglecting to keep on top of cybersecurity, or strategic business decisions.
As companies navigate this new ground, the way they approach risk management will need to take into consideration the effects of technology on business day-to-day and into the future.
Following are some of the top enterprise risk management trends to consider for 2022:
It is a given that cybersecurity will remain top of the list of priorities for enterprise risk management (ERM). Throughout the pandemic, cybercrime increased exponentially, as malicious actors took advantage of the fear and anxiety people were experiencing. Businesses have been overwhelmed with ransomware attacks, which increased by 60% in one year, while the remote and hybrid work models adopted rapidly have increased the attack surface for enterprises around the country. Data breaches that expose sensitive personal or business data negatively impacts both the reputation and financial future of a company, and often happen as a result of employee negligence or poor cybersecurity practices.
The past few years have felt as though the world has reeled from one disaster to another. Events such as fires, floods, volcanoes, blocked canals, lockdowns, earthquakes, and crowded ports, have all contributed to business disruption. This is a key risk area to consider for the future, finding a way to minimise the impact of future events on business operations and supply chains.
As the business world continually shifts to online operations and utilising the cloud to ensure business continuity in the hybrid workplace, data privacy becomes a critical area of concern. Risk management strategies will need to consider the latest changes in data privacy laws, or face significant penalties for breaches, potentially impacting the future of the company.
Another area of risk management that needs careful consideration for 2022 is the so-called great resignation, referring to talent shortages in many industries as businesses are struggling to fill job openings. Retaining employees already in the organisation and reorganising how job knowledge is shared and captured before it exits the company should be embedded in risk management processes.
Changes to regulation
New regulations are already being fast-tracked for cybersecurity standards, which will create a new standard for businesses in many sectors. Globally, political and economic changes will impact regulatory activity and create challenges in the regulatory landscape that will impact businesses everywhere. This will affect how risk managers prioritise compliance and where to invest resources and budget to meet these regulatory changes. Regulatory technology (also known as RegTech) has become mainstream in the financial services industry, and is set to become standard in almost all other sectors. RegTech improves how businesses can manage regulatory compliance while providing government oversight.
Third-party risk management
Supply chain issues are said to continue well into 2022, with material availability and delivery timetables being severely affected. However, organisations are becoming more vigilant about verifying their third-party suppliers meet compliance and regulation standards, as more than half of all security incidents result from issues with third parties, or through their partners further down the supply chain. Risk management processes need to take into consideration risk exposure from third parties and insist on robust risk management systems that can avoid serious liability for your organisation.
The future is looking bright but it is never too late to consider the risks your business faces. Speak to the IT consulting team at INTELLIWORX, who offer expert governance, risk, and compliance consulting services to ensure your enterprise IT environment is prepared for anything in 2022.