Emerging Technologies The risks they pose to your · explosive growth in e-commerce, m-commerce and multi-channel retailing • Online-only clothes retailers are growing rapidly at

Emerging

Technologies

The risks they

pose to your

organisations

10 June 2016

2 Emerging technologies and their risk to your organisations Copyright © 2016 DCB Holdings and its affiliate

Digital trends are fundamentally changing the way

that customers behave and companies operate

Mobile Connecting people and things wherever they are

Social The rise of virtual communities

AnalyticsRemoving the guesswork

CloudEverything-as-a-service

Cyber

securityProtection in a digital world


Big bang short fuse

Digital disruption


Examples of digital disruption across industries

• The pace of innovation has increased, making products obsolete

faster than ever

• For example, companies that used to dominate the camera and

photo film industry have suffered two waves of digital disruption:

1. The transition from photographic film to digital photography

2. The improvement in camera phone quality, reducing the

demand for standalone cameras

ICT and Media

Retail Trade

Financial services

• Increasing internet and smartphone penetration has resulted in

explosive growth in e-commerce, m-commerce and multi-channel

retailing

• Online-only clothes retailers are growing rapidly at the expense of

physical stores. ASOS, a UK-based company, has experienced

annual growth of 40% with revenues over £500m

• Rising use and acceptance of mobile banking and payments

based on multiple competing platforms has the potential to disrupt

incumbent financial services companies

• New digital entrants are threatening the role of traditional retail

banks with innovative lending models such as P2P and internet-

based payday loans

Digital disruption has the power to transform entire

industries.


AON Global Survey 2015

Top 10 major risks 2. Economic slowdown

/ slow recovery

1. Damage to

reputation / brand

3. Regulatory

/ legislative changes

4. Increasing competition

6. Failure to innovate

/ meet customer

needs

5. Failure to attract or retain top

talent

7. Business

interruption

8. Third party liability

10. Property damage

9. Computer Crime /

hacking / viruses / malicious

code


Failure to attract / retain new talent


Failure to attract retain new talent


Increasing competition


Deloitte Strategic Risk

Survey 2013

Strategic risk has become a major focus:

- Deloitte global survey 2013

- Strategic risk management practices

- 300 major companies globally

- 81% of surveyed companies explicitly

manage strategic risk – over and above

traditional areas such as operational,

financial and compliance risk

Strategic risks – those that

either affect or are created

by business strategy

decisions – can strike more

quickly than ever before,

hastened along by rapid-fire

business trends and

technological innovations

such as social media,

mobile and big data


Reputation cited as the #1 risk


Reputation cited as #1 risk

Reputation risk is now the biggest

risk concern: Due in large measure to

the rise of social media, which enables

instantaneous global communications

that make it harder for companies to

control how they are perceived in the

marketplace.

“One of the big changes in recent years is speed to market,” says

ANZ’s Jennifer Evans. “As a consequence of social media, reputations

built up over decades can be challenged in an instant …”


Emerging technologies have the power to

disrupt business models


Emerging technologies have the power to

disrupt business models

Actions to

take


Have an explicit focus on strategic risks


Boards and CEOs driving strategic risk

management

17 Emerging technologies and their risk to your organisations Copyright © 2016 DCB holdings and its affiliates.

Questions to ask

Questions to ask CIO/IT about emerging

technologies

• Which technologies or other

opportunities have the potential to

provide substantial or transformative

benefits for the company?

• Is our data structure appropriately

and thoughtfully organized, and

does it mitigate the risk of critical

information leaving the company?

Mobile

• How do we secure our mobile

devices and disseminate a policy

governing their appropriate use?


Questions to ask

Cloud

• Is our organization using cloud-

based computing, and if so, have

the financial benefits been

weighed against the attendant

risks? Do we have a plan for

monitoring cloud specific risks?

• How can cloud-based and

traditional systems be integrated

to create centralized solutions that

provide secure and predictable

performance and reduce

redundancies?

• Which systems should be based

in the cloud, and which should be

operated on-site?


Questions to ask

Social Media

• Do we have a thorough policy

regarding social media usage by

employees that is understood

throughout the organization?

• To what extent does the company

leverage social media, and how?

• What are the most significant

social media risks the

organization faces?

• How do we monitor internal social

media usage, as well as external

mentions of the organization on

social media outlets?


Questions to ask

CyberSecurity

• How do we know who is logging into our network, and from where?

• How do we track what digital information is leaving our organization

and where it is going? Do we have an effective data loss prevention

program?

• Which cyber threats and vulnerabilities pose the greatest risk to

the organization’s business and reputation? What are the key assets to

be protected? What is our strategy to address identified weaknesses?

• What systems are in place to protect information transferred

through mobile technologies? Is there a culture of responsibility

with regard to using mobile devices?


Questions to ask

CyberSecurity

• Is management focused on making

cyber risk part of everyone’s job, and

not just IT’s?

• Do we have the right gauges to

measure the success of our cyber

threat management program?

• Are we planning to map our policies

to an industry standard Security

Framework?

• What are our training programs to

educate our workforce about cyber

risks and responsibilities?


Tips for enhancing Cybersecurity Governance

• Focus on controls for the most critical data

areas

• Evaluate the cyber incident response plan

• Annually review cybersecurity budgets

• Require regular reports based on key risk

indicators rather than on project status

• Work with specialists to stay apprised of

recent developments in technology and

cybersecurity

• Confirm that privacy and security requirements

for vendors (cloud, mobile, hosting) comply

with the company’s security program

• Conduct an annual evaluation of the use of

and need for cyber insurance

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Emerging Technologies The risks they pose to your · explosive growth in e-commerce, m-commerce and multi-channel retailing • Online-only clothes retailers are growing rapidly at