Digital risk management is assessing, monitoring and responding to new risks resulting from digital transformation and continued adoption of disruptive technology.

As government agencies extend technology deeper into their day-to-day business operations, they introduce unwanted and often unexpected outcomes that stem from digital transformation, digital business processes and the adoption of related technologies.

While the major areas of digital risks are nothing new, the nature of these risks amplifies the scale and velocity of risk across organisations. These risks manifest themselves in a variety of ways depending on the nature of the organisations’ digital transformation journey. Below are the key areas affected by digital risk.

Workforce

Government agencies are moving to a more mobile workforce which is always connected by devices to corporate systems. Additionally, public service staffing level caps mean that there is an increased reliance on contactors and third-party service providers. This has resulted in a far more complex human resources environment to manage. From insider threat, to access management and an increased attack surface there are a number of evolving risks as a result of this workforce transformation.

Third Party

Digital transformation expands organisations’ third-party ecosystems, making them more complex and difficult to manage. In the context of Government, these third parties are not necessarily vendors. Governments increasingly share information between agencies and to third party organisations to facilitate digital services to citizens. The scope and complexity of today’s third-party ecosystems make it harder to proactively identify and manage the security, access, compliance, resiliency risks and their overall third-party risk exposure.

Cloud

Embracing cloud applications and services results in complexity across external and internal platforms and legacy applications being managed by agencies. Organisations frequently lack visibility into their organisation’s complex, multi-cloud environments, which impedes their ability to proactively detect and respond to cloud-based threats. Cloud applications and services are spread across different functions within an organisation meaning that cloud risks are not identified, assessed, treated or monitored consistently.

Compliance

One response to the risk associated with digital transformation has been the introduction of additional regulations and Government policy. Increasingly agencies must comply with new and increasingly complex requirements to ensure that digital transformation is implemented consistently across government. Government audits are now focused on large transformational projects to ensure requirements are met. Activities associated with digital transformation, such as IT modernisation efforts or the creation of new platforms for interacting with customers, introduce compliance considerations that manifest more quickly and with more inherent risk.

Process Automation

As organisations extend IoT, operational technology and other digital technologies into manual or analog business operations, they create new possibilities for automating processes to drive innovation and efficiency. But in adopting these emerging technologies, they trade traditional risks of operational failures (errors, mistakes, disruptions, etc.) for a new wave of often unforeseen risks. This shift may require changes in how to identify, assess, treat or monitor operational risk.

Resiliency

Disruptions to operations because of digital technologies have become commonplace. Organisations today must deal with a wide range of potential disruptions and crises—from large-scale data breaches, natural disasters and other technology failures. These challenges will intensify as organisations progress with digital transformation. Increased digitisation of day-to-day operations makes organisations more vulnerable to these disruptions. At the same time, digitisation heightens expectations of 24×7 availability, while social media and increased compliance requirements invite intense scrutiny of even the smallest disruption.

Data Privacy

Digital Transformation means that government agencies are collecting and managing more personal data than ever. Ambitious digital initiatives create tremendous challenges not only in coping with the scale and scope of data, but also in understanding the value of different types of data and the protection level required to manage data risk. Unfortunately, in most organisations, the pace of expanded collection and use of data is moving faster than the ability of governance to keep up.

Cyber Security

With the expansion of digital operations, the cyber attack surface for adversaries becomes wider. This makes it more difficult to detect, prioritise and respond to threats. State actors are targeting official information to obtain commercial and diplomatic advantage over others. Digital transformation extends the consequences of a cyber incident throughout the business, across third parties and into the cloud.

How does digital risk affect your organisation?

Digital risk affects all public sector organisations as they go through the process of transforming digitally. Agencies will be affected differently depending on their size, business and maturity. To find which challenges of digital risk affect your organisation and how to tackle these risks Digital Risk Index.