Technology Risk: Complex Interactions of Technology Mash-Ups Create Risk

Risk Information Technology Management is a strategy for organizations to properly manage the risk associated with their information technology assets.  Events which can adversely impact IT operations and productivity include data loss, financial crime and fraud, corruption and inaccessibility, IT system continuity, and system and infrastructure failures.  Business sectors particularly sensitive to IT Risk include banking and finance, capital markets, and insurance.

A recent report by IDC found that in 2014 IT organizations will, on average, spend 16.5 percent of their budget on IT risk abatement.  The number will grow to 18 percent of budgets by 2017.  That equates to $71.2 billion global spending in 2014 and $87.4 billion spending in 2017.

Michael Versace, Global Research Director of IDC Financial Insights, said that “regulatory pressures, tightening, and oversight resulting from the financial and economic upheavals of the past decade and the first three years of the current decade continue to be prime motivators for risk management investments. Risk IT strategies and investments over the forecast period will remain critical as policymakers around the globe stay focused on capital buffers, trade transparency, accounting and reporting improvements, internal control and IT system continuity, third-party risk, financial crime and fraud, and the impact of cyber threats on the safety and soundness of the financial marketplace.”

The IDC report singles out technology ‘mash-ups’ as both contributing great value to organizations but at the cost of much greater security risk.  Businesses which create tools based on technologies like big data analytics, cloud, mobile and social networking can provide value to customers, and can improve efficiencies and operations.  But the complexity of these technologies can lead to risk.

Sandra Ng, IDC Asia Pacific’s Group Vice President, said that “we believe that more and more organizations will be deploying multi-dimensional technologies what we call ‘mash-ups’, which is really a combination of cloud, analytics, mobile, social all a combination. This is a lot more complex than just deploying mobility, or just deploying cloud as a stand-alone technology area. Secondly it’s the pace of change which is definitely accelerating… These two factors come into play and the risk factor of problems and security breaches increases.”