As the technology landscape changes, companies find themselves at the intersection of innovation and risk management. Companies that are implementing digital transformation and integrating cutting-edge technology into their operations are tasked with mitigating many potential risks.11th Annual Global Technology Audit Risks investigationThis study conducted by the Institute of Internal Auditors (IIA) sheds light on the top technology risks that are keeping chief audit executives (CAEs) and IT audit leaders up at night.
1. Cybersecurity
Unsurprisingly, cybersecurity tops the list of technology risks, with 82% of CAE and IT audit leaders identifying cybersecurity as a high-risk area. In an era of looming cyber threats and where data breaches can have serious consequences, organizations need to strengthen their defenses and stay one step ahead of cyber criminals.
2. Third Parties and Vendors
Next to cybersecurity, 67% of respondents highlighted risks related to third parties and vendors. Modern business environments are interconnected, and organizations rely on external partners for a variety of services. supply chain Disruption, regulatory changes, and the rise of cloud services require intense scrutiny. third party The provider ensures compliance with security and data protection standards.
3. Data governance and integrity
Maintaining accurate, consistent, and reliable data across your enterprise is essential. 64% of respondents emphasized the importance of data governance; Honesty. More than just compliance, good data governance is the foundation for successful digital transformation and artificial intelligence (AI) initiatives, highlighting the critical role of data governance in organizational strategy.
4. Transformation and system implementation
Any major business or IT change, such as transformation or system implementation, involves significant risks. His 62% of respondents highlighted potential disruption, unmet requirements, and data loss due to these changes. Surviving such a transformation requires careful planning and execution to effectively mitigate the associated risks.
5. Management of IT human resources
Balancing your workforce is important, especially in the technology sector. 60% of respondents focused on IT talent management, which includes attracting, developing, and retaining skilled technology talent. Getting the right balance of talent is critical to ensuring a skilled and resilient technology workforce.
6. Artificial intelligence
Only 28% of respondents identified AI and machine learning as a significant threat over the next 12 months, while 54% expressed concern about AI systems over the next two to three years. CAEs and IT auditors are somewhat concerned, with 33% believing AI is a significant short-term risk. As AI advances, organizations must address ethical considerations, data privacy, and potential biases inherent in AI algorithms.
Given these technology risks, organizations are being asked to increase the frequency of technology audits. Additionally, introducing data analytics into technology audits provides timely insights into traditional and emerging risks. These strategies improve organizational readiness and technology audit proficiency to address challenges ranging from cybersecurity to AI-related risk management.
Understanding and addressing these technology risks is paramount for audit committees. Discussing the company’s key technology risks and strategies to mitigate them with internal audit executives can foster a proactive approach. Staying ahead of the curve allows organizations to confidently navigate the digital frontier and ensure resilience in the face of evolving technological challenges.