Editor’s note: The ISACA Now blog is looking ahead to 2024 with to-do lists from ISACA experts for professionals working in IT audit, risk management, information security, privacy and IT governance. Today, Mary Carmichael shares her 2024 to-do list for risk professionals. See more risk resources from ISACA here.
Welcome to a new era in risk management! As we steer through a world increasingly defined by volatility, uncertainty, complexity and ambiguity (VUCA), it becomes evident that traditional risk management approaches are no longer adequate. We’re navigating through a transformative era, marked by disruptive technologies like generative AI and influenced by global geopolitical tensions, presenting distinct challenges and opportunities that require new risk strategies.
The VUCA environment is transforming risks into a highly interconnected ecosystem. Far from existing in silos, these risks form a complex ecosystem where the impact of one can significantly influence others, creating a cascading ripple effect. Take, for example, the Colonial Pipeline ransomware attack. This wasn’t just a temporary disruption causing fuel shortages and price hikes—it exposed critical infrastructure vulnerabilities, highlighting the need for proactive risk management strategies.
A shift in risk management strategies is required. For example, by using analytics and real-time threat detection, organizations are achieving more than just the protection of sensitive data. They are proactively identifying and mitigating potential threats. This is not only a defensive measure—it’s a strategic advantage in navigating the complex risks of our interconnected world. As we approach 2024, risk management professionals should focus on five key actions to not only survive but to thrive in this VUCA environment.
1. Embracing Strategic Thinking and Business Acumen
Understanding the need for taking calculated risks is crucial for organizational growth. Risk professionals play a pivotal role where they must balance risk mitigation with the potential opportunities that risks present. This dual perspective is not just about preventing loss but also embracing risk-taking by supporting strategic initiatives like market expansion and product innovation, all of which inherently carry risks but are essential for organizational growth.
To effectively manage this balancing act, risk professionals can leverage tools like the Risk IT Framework from ISACA. This framework aligns IT risk management with wider business goals, focusing on identifying, assessing and managing IT risks in ways that support organizational objectives. With this approach, risk managers can craft strategies that not only protect against threats but also enhance business agility, innovation and market competitiveness. This shift transforms risk management into a strategic asset, encouraging calculated risk-taking as a key driver for business success.
2. Adapting to Emerging Risks and Building Organizational Resilience
Organizations face a critical question: how can they stay ahead of unforeseen challenges? This requires understanding and adapting to emerging risks—like those new, evolving threats that arise from disruptive technology and changing regulatory landscapes. So, let’s consider this scenario: a technology firm faces a sudden regulatory change, impacting its operations. How it responds—by quickly adapting and deploying innovative solutions—can mean the difference between thriving or barely surviving. This is where organizational resilience becomes pivotal, transforming challenges into opportunities.
But how do risk professionals identify emerging risks, particularly those associated with disruptive technologies? This lies in fostering a mindset that emphasizes continuous learning and constant monitoring of risks. This approach is complemented by innovative methods such as agile risk assessments and scenario analysis. Moreover, ISACA plays an instrumental role by providing access to a global network of expertise, supporting the risk community with dialogue about technology-focused risk analysis, digital literacy and understanding of the ethical and regulatory aspects of new technologies.
3. Gaining Digital Proficiency
In the VUCA world, the role of data analytics and digital tools is indispensable. Risk managers are required to navigate through vast amounts of information and use data analytics to identify, assess and manage risks. Their ability to analyze extensive data sets is not just a valuable skill—it is a critical element in identifying emerging risks. Imagine risk professionals using data analytics to uncover a cybersecurity breach within a company. This discovery prompts the implementation of stronger controls, strengthening the organization’s security posture.
Digital proficiency equips risk professionals with the ability to leverage tools like data analysis, data visualization and artificial intelligence. This enhances their capacity to identify and anticipate potential risks and vulnerabilities. Staying abreast of the latest digital advancements in their industry is essential for integrating data analytics into a proactive risk management strategy.
4. Communicating and Influencing Skills
The role of risk professionals extends beyond risk assessment activities. Effective communication of risk-related information to stakeholders, including those without an expert background in risk management, is critical to this role. This communication is crucial for fostering an organizational culture that is aware of and responsive to risks.
Moreover, these professionals are instrumental in shaping the organization’s strategic decisions. They achieve this by actively engaging with executive teams, offering analytical support and building trust. Such interactions not only enhance the risk professional’s understanding of the business but also promote a collaborative culture. To excel in this capacity, risk professionals need training in strategic communication, leadership and stakeholder engagement, enabling effective interaction with business groups and contributing to their organization’s strategic direction.
5. Understanding the Regulatory Environment
For risk management professionals in 2024, it is essential to comprehend the AI and privacy regulatory landscape. The expanding role of AI across various sectors introduces advancements along with significant privacy issues, including data breaches and surveillance. Key regulatory frameworks include:
- The EU’s Artificial Intelligence Act, which establishes a risk-based framework for AI, particularly for high-risk systems like biometric identification.
- The updated EU GDPR, which sets standards for AI’s use of personal data, focusing on consent, transparency and accountability.
- Global regulatory frameworks, with diverse international regulations from entities like the Organisation for Economic Cooperation and Development (OECD), and national laws in countries like the USA, Brazil, India, and China, creating a multifaceted environment for AI and privacy management.
The Future of Risk Management
As we venture into 2024, risk professionals embrace a broad skill set and forward-thinking approach through strategic thinking, digital proficiency and a deep understanding of the regulatory environment. By adapting to the VUCA world, these professionals are not just responding to challenges—they are proactively shaping a future where risks are managed as strategic opportunities, ensuring organizational resilience in an increasingly interconnected world.
