Different Information Technology That Has Impacted Risk Management
How Does Information Technology Influence Risk Management?
Due to massive advancements in information technology, it has impacted various life domains like marketing, entertainment, learning, politics, and business. One of those domains happens to be risk management, which was greatly impacted by this advancement mainly because it’s based on data. Information technology has made it easier to automate all of the processes whether it is risk identification, monitoring, and so on. Certain new technology is highly important when it comes to risk management such as enterprise resource planning (ERP), analytics, cloud computing, Big Data, mobile applications, and GRC (governance, risk, and compliance) systems. Because of advancements in technology, people in management, people outside organizations, and risk managers can also improve.
Here are the various information technology domains and how they affect risk management.
1. Social Media Analytics
Since social media has quickly risen in popularity, certain businesses regularly monitor and keep track of their social media content to gather information regarding various matters such as the quality of their product, any issues with service delivery, how efficient their customer service is, and so on. Therefore, due to a large quantity of available social media content, a business can look into its insights and see the response of the public to its product or service. This helps the business in improving and avoiding serious damage to their reputation by using management tools to work on their products and service issues.
2. Data Integration and Analytics
Currently, numerous organizations have a massively wide range of databases in production. Hence, several IT departments are busy properly integrating them with current applications to get more value from the IT investments. Moreover, a lot of these databases also consist of data points that are extractable, consumable, or can be mined by other powerfully advanced computing platforms so that they generate more organizational value as time passes.
3. Data Mining
There are numerous advantages of data mining techniques that can benefit organizations such as predicting machinery or component failure, estimation of how much profit the company will make, recognizing scams and frauds, and so on. Through the use of various types of data mining techniques, prediction helps with classification, analyzing trends, relations, and pattern matching.
4. Cloud Computing
When calculating GRC applications, it is important to understand or think about the advancement of cloud-based IT environments. Some of them offer ‘on-demand’ GRC software in the form of a service (SaaS) and utilize fundamental virtualization capabilities of things like platform-based operating systems plus the infrastructures related to it and middleware software. They also offer their ‘tenant’ users additional economical and efficient alternatives to purchasing a GRC application, so they can run it in-house. Moreover, ‘tenants’ or cloud-based applications, including the organizations that utilize them offer and charge only for the processing power which is needed by users of such applications.
When it comes to cybersecurity, it is known as a body of processes, practices, and technology that are designed to keep programs, data, computers, and networks safe from all forms of harm, damage, attack, and people who are not authorized to access anything.
The top cybersecurity companies are publishing the current and latest threats, systems, breaches, and malware, hence risk managers can greatly benefit from all of this information. Through this data, they will gain more knowledge regarding all of the risks that might take place whenever they use some form of technology. This will also help them in picking the right security defenses to prevent any risks.
On the other hand, security risks are constantly advancing and evolving, hence it takes time for cybersecurity to quickly understand these risks. Therefore, the traditional approach and the main focus is to protect all of the crucial system components against the major threats, while leaving the less important system components unprotected. This means that the less dangerous risks are also openly out there. This type of approach makes things more difficult and unsatisfactory within the current situation.
6. Artificial Intelligence
AI, also known as artificial intelligence, is a type of cognitive technology which utilizes human processes and integrates them within networked machines. When it comes to risk management, artificial intelligence can be used to combine procedures, controls, and policies with the regulators plus the regulatory changes to enhance the organization’s compliance.
What Are Some of the Potential Challenges?
The advancement in information technology is greatly influencing risk management. But, it should be noted that every single one of this technology comes with its risks. That is why it is important to be aware of all of the potential vulnerabilities that come with using technology.
When saving enterprise data on the cloud, for example, so that it can be used in the risk assessment process, there might be a privacy issue, particularly when it is confidential data that is being stored, like strategic plans or the latest invented products.
That is why every organization should hire experts and IT specialists who possess good knowledge that can help them in taking care of any potential risks that might come with using technology. On the other hand, a company should also have a contract signed with an external IT company, which could result in a privacy breach.
In this comprehensive article, we discuss risk management and how different information technology has influenced it, such as social media analytics, cybersecurity, cloud computing, data mining, artificial intelligence, and so on. Alternatively, we also discuss certain challenges one might come across when using this technology.
One of the many ways these challenges can be dealt with is by studying the risks that are caused by using various forms of information technology to get a hold of the risks that could impact an organization. It will also help to know if integrating too much technology could be risky or not.