What’s the hidden factor that’s catapulted 64% of security professionals into the advanced stages of digital risk management in just one year? Driving this seismic shift is a connected risk approach that’s revolutionizing how organizations respond to complex digital threats using AI. AuditBoard’s 2024 Digital Risk Report: Opportunities and Challenges of the AI Frontier, conducted in partnership with Ascend2, reveals transformative shifts in how leading enterprises are managing digital risks.
Dive into our comprehensive report to uncover key insights, including:
- Comprehensive risk assessment strategies.
- Techniques for fostering strong interdepartmental collaboration.
- Strategies for preparing for emerging AI risks.
- Best practices for leveraging advanced technologies.
Our research indicates a notable shift towards utilizing cloud-based risk management software as a primary solution for managing digital risk, with 81% of security professionals reporting use. In 2023, only about 30% of enterprises reported using cloud-based solutions as their primary means of digital risk management. Replacing manual processes with cloud-based risk management solutions is crucial for improving efficiency and scalability in digital risk management. Here’s a passage from the report for one of the five best practices we recommend.
Best Practice #1: Embrace Comprehensive Risk Assessments
Combine Qualitative and Quantitative Analysis
Many organizations recognize the importance of a thorough and multifaceted approach to managing third-party digital risk. 37% of those surveyed used a combination of qualitative and quantitative risk assessments supported by risk questionnaires, targeted audits, and independent data analysis. Qualitative assessments provide context and detailed insights into the nature and potential impact of threats, while quantitative assessments offer measurable and objective data.
Enterprises combining qualitative and quantitative analysis based on internal and external views are arming themselves with more robust data, making them better positioned to identify, assess, and manage third-party risks effectively. In fact, according to our research, these organizations are significantly more likely to find their reportable metrics to be very effective.
The Benefits of Real-Time Data and Automation
Integrating real-time data feeds and automated risk-scoring systems into your reporting will make your data work harder, enhancing the timeliness and accuracy of third-party risk assessments.
- Make more effective decisions. Real-time insights enable more informed decision-making, prioritization of risk mitigation efforts, and allocation of resources.
- Improve efficiency. Automation can help streamline processes and workflows, allowing enterprises to scale risk management efforts more seamlessly.
- Get ahead of risk. With real-time data and automated scoring, organizations can proactively monitor third-party risks, identifying potential issues before they escalate.
Incorporate Internal and External Perspectives
Nearly two-thirds (65%) of organizations incorporate internal and external views in their qualitative risk assessments. These views are supported by techniques such as risk questionnaires and targeted audits. This approach helps organizations get a complete picture of third-party risks, ensuring that internal insights and external factors are considered, providing a thorough understanding of risks from multiple perspectives.
Internal data highlights company-specific issues, while external data reveals industry-wide challenges and external threats. Together, they enable the development of holistic risk mitigation strategies that address all potential risk areas.
External data can also help to validate and complement internal data, providing an objective viewpoint that can improve the accuracy of risk assessments. By incorporating external threat intelligence and industry trends, companies can anticipate and prepare for emerging risks. This proactive approach allows for timely adjustments to risk management strategies.
The Importance of Data Validation and Optimization
Digital threats constantly evolve, with new vulnerabilities and attack vectors emerging regularly. That is why continuous validation of the data you collect and a focus on continuous improvement of risk management are critical. This ensures that risk assessments remain relevant and effective in addressing current threats, allowing enterprise organizations to anticipate and respond to emerging threats proactively.
Advanced analytics, machine learning, and automation can further optimize risk assessment processes and will be key to managing and mitigating risk at scale. These technologies can identify potential threats and risk factors for more comprehensive insights, and learn and adapt to become even more accurate over time.
Four of five IT teams use AI to support their risk management objectives, but AI shouldn’t be limited to IT. Cross-departmental use of these technologies can enhance threat detection and efficiency, scalability, collaboration, and resiliency across the organization. In fact, those with the strongest digital risk management collaboration report more use of AI in their finance, IT, and HR departments than others.
Ready to transform your digital risk management strategy?
As we’ve seen, the integration of AI and cloud-based solutions is transforming digital risk management. However, technology alone isn’t enough – strong interdepartmental collaboration and comprehensive risk assessments are equally crucial. The organizations that excel in digital risk management are those that take a holistic, connected approach. By adopting these best practices, your organization can not only mitigate risks more effectively but also turn potential threats into opportunities for growth and innovation. Take the next step in your digital risk management journey by downloading the full report and implementing these insights across your enterprise.
