The digital transformation that has seen most companies design new strategies aimed at providing innovations that are more attuned to changing customer expectations, may also be creating complications in terms of data privacy and new regulation.
The 15 Global Fraud Survey conducted by Ernst & Young (EY) with theme, “Integrity in the Spotlight: the Future of compliance,” has found that open and connected business models are likely to result in increased exposure to cyber threats and ransomware.
“Increased global connectivity means that anyone with access to company data, anywhere in the world, can exploit weaknesses in data security. Companies’ critical digital and physical assets are therefore at greater risk of theft, damage and manipulation by insiders than ever before,” Andrew Gordon, Global leader, Fraud Investigation & Dispute Services, EY, said.
The recent Cambridge Analytica data breach that hit over 80 million Facebook users globally underscores the not-so-bright effect of digital transformation. Cambridge Analytica has shut down and filed for bankruptcy as a result of the data scandal.
As technological innovations grow on the back of big data provided by millions of internet users across the world, cyber criminals are also perfecting their digital skills to take advantage of every vulnerability.
Following the Cambridge Analytica breach, thirty-four major technology companies like Facebook, Microsoft, HP, ARM, Cisco and Oracle signed a new Cybersecurity Tech Accord, pledging to help protect cyber attacks as well as not encourage governments launch them against innocent citizens and businesses.
“In the last two years, cyber attacks have been widespread and have included a global ransomware campaign that impacted over 45 countries,” the EY survey sent to BusinessDay, stated. “It is therefore not surprising that 37 percent of our respondents see cyber attacks as one of the greatest risks to their business.”
The respondents interviewed by the EY survey include 2,550 executives from 55 countries and territories.
Nevertheless, EY expects that advances in technology, particularly in artificial intelligence, machine learning and automation will also play major roles in transforming legal and compliance functions. Companies can also look towards adopting forensic data analytics (FDA) to enhance risk mitigation and improve business transparency.
Citing a recent Global FDA survey, EY said it demonstrated a strong recognition by respondents of FDA’s effectiveness in managing various risks including corruption, financial statement fraud, data protection and data privacy compliance, and cyber security.
“A growing digital footprint alters the traditional risk landscape for individual companies and entire industry sectors. Out-of-date risk assessments and antiquated policies, procedures and controls can result in companies missing opportunities to help employees comply with company policy. Worse yet, such gaps can be exploited by rogue employees intent on fraud, data theft or other illegal acts. It is important that the effectiveness and efficiency of compliance is improved. Failing to do so exposes the company to regulatory and law enforcement scrutiny,” the survey noted.
Technologies that can transform legal and compliance functions include artificial intelligence, machine learning and automation.
“It will be interesting to see if companies with a reputation for integrity give more confidence to consumers and therefore make their customers less likely to request deletion of their personal data,” Gordon said.
