4 ways to build resilience to digital risks in the COVID-19 era

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Robert Muggah Founder, The SecDev Group and Igarapé Institute & Rafal Rohozinski, Founder, The SecDev Group

  • By 2026, almost 26% of the world’s GDP could be based on internet-based and digitally-connected industries.
  • Seizing digital opportunities begins with an understanding of digital risk; at a minimum, companies need to understand their total exposure.
  • Following key principles of digital risk management will separate the companies that will thrive in the digital age from those that will not.

The COVID-19 pandemic is generating monumental challenges for most governments, corporations and societies, both online and off. There is a very high probability that we’ll look back on 2020 and 2021 in much the same way as we did during the aftermath of World War II, itself another era of profound international transformation. One thing is for certain: there is zero probability that we are returning to the ‘old normal’.

Within months, the virus disrupted systems that many take for granted – from international air travel and easy movement across borders, to access to goods and services and just-in-time supply chains that power trade. We are seeing patterns of commerce and exchange being radically fragmented and reordered. For many people left behind, the virus has exacerbated divides, deepened inequality and expanded extreme poverty.

Although a handful of countries have started on the path to recovery, especially in Northern Europe and Asia, most have tightened their borders and curtailed services. Despite the emergence and roll-out of vaccines in record speed, between 20% and 30% of the global population is still living under some form of lockdown or closure.

Although the economic costs of the pandemic are severe, they are only just beginning. Global GDP contracted by at least 3.5% in 2020 and while a rebound is expected, the disease has had far-reaching effects on small and medium-sized businesses and wider sustainable development indicators. Whilst the stock market is booming, the impacts on the real economy are dramatically worse than the 2008 financial crisis or the Great Depression.

Complicating matters, COVID-19 is occurring at a time of deepening geopolitical divisions, heightened tensions and trade wars. The pandemic arrived precisely at a moment when international cooperation was most needed to deal with the myriad of global challenges, from climate change to nuclear threats and cybersecurity.

Image: The Global Risks Report 2021/World Economic Forum

A threat to business

One of the most visible consequences of the COVID-19 pandemic for companies is the rapid acceleration in digital transformation. The equivalent of a decade of digital onboarding occurred in 10 months. Overnight, businesses were forced to adapt to quarantines, restrictions and physical distancing. Entire workforces started working from home, and business processes and supply chains were re-engineered.

More than ever, companies now must go digital or die. Dependence on cloud computing jumped by a third in 2020. Network operators registered as much as a 70% increase in the demand for internet and mobile data services. Videoconferencing sky-rocketed by 700% last year. Not surprisingly, the valuation of social media and remote conferencing companies soared.

This growing dependence on all things digital has a dark side. Cybercrime, especially ransomware, also increased exponentially. Digital attacks infected critical infrastructure, health facilities, federal and municipal government services, and corporations. Last year, one of the most audacious cyberattacks ever undertaken was discovered – a cascading supply-chain attack – that could change the way the internet is managed moving forward. No one is safe – and we’ve only seen the beginning.

Making matters worse, the digital economy is generating negative externalities, including accelerating climate change. Notwithstanding a slew of efforts of tech firms to clean up their act, they are still among the most unsustainable and environmentally damaging in the world. Technology redundancy and planned obsolescence are creating huge amounts of waste. And the expansion of internet services is consuming about one-tenth of global electricity production. Right now, Bitcoin mining uses over 7 GW, the equivalent of seven nuclear power plants. It has a carbon footprint comparable to that of New Zealand.

More information on how automated trading tools can help you buy Bitcoin, can be found by reading this Immediate Edge review.

Managing digital risk

Some of the most successful businesses turn risk into opportunity. One of the most appetising is the global digital transformation and the digital economy. By 2026, almost 26% of the world’s GDP could be based on internet-based and digitally-connected industries.

Seizing digital opportunities begins with an understanding of the many dimensions of digital risk. It requires acknowledging the direct and indirect impacts of digital transformation – how technologies are changing and transforming government regulations, business efficiencies and client preferences – especially on issues of privacy and data protection.

Companies need to set their risk tolerance: how much risk are they prepared to assume in order to achieve new economies of scale?—Robert Muggah, co-founder of the Igarapé Institute and The SecDev Group

At a minimum, companies need to quantify their total exposure. Digital risks necessarily impact on earnings and revenue. They are also intrinsically linked to technological choices and awareness of the regulatory environment. The truth is that one’s reputation in the digital age is potentially global and instantaneous. It can also be extinguished in the blink of an eye. Companies need to set their risk tolerance: how much risk are they prepared to assume in order to achieve new economies of scale?

Navigating digital opportunity

There are at least four straightforward principles to thinking about how to identify, mitigate and build resilience to digital risks.

The first is to approach digital risk as an enterprise-wide issue and not just an IT issue. Digital risk is a combination of people, processes and technologies. Determining what matters and what doesn’t starts with a risk assessment to help identify the most valued assets, where they’re located, how they are protected and who has access. It means deciding who is in charge, and delegating authority and accountability as appropriate.

A second principle requires assessing and understanding the legal applications of digital risk. The regulatory environment for new technologies is fluid and fast changing. It is shaped by politics from the international to the local levels. Concerns with foreign interference or privacy and loss of personal data are real and consequential; corporations can be fined and executives can be jailed.

The third principle is to ensure that company leadership is on top of the emerging risks and in constant contact with management. Executives must be able to answer the following questions: how secure are we and how do we know? What’s the value at risk? What are the geopolitical and geo-digital threats to the company? What are the gaps, what we need to know next? A constant dialogue with experts within the company and outside – keeping a pulse on global trends – is more essential than ever.

A fourth principle involves setting up a clear playbook to appraise and respond to digital risk. Approaches will vary and evolve, but all companies need to start by measuring the value at risk. This means assessing digital exposure as it relates to impacts on earnings, the amount of time required to fix attacks, the capital and operational costs required, the loss of revenue, and the potential for fines.

Firms should also create a risk register – integrate digital threats into the business risk model – to easily communicate threats to corporate leadership. Risk management standards are key, as is applying them so they provide the right metrics to drive decision-making.

What is the World Economic Forum doing on cybersecurity

The World Economic Forum’s Centre for Cybersecurity is leading the global response to address systemic cybersecurity challenges and improve digital trust. We are an independent and impartial global platform committed to fostering international dialogues and collaboration on cybersecurity in the public and private sectors. We bridge the gap between cybersecurity experts and decision makers at the highest levels to reinforce the importance of cybersecurity as a key strategic priority. World Economic Forum | Centre for Cybersecurity

Our community has three key priorities:

Strengthening Global Cooperation – to increase global cooperation between public and private stakeholders to foster a collective response to cybercrime and address key security challenges posed by barriers to cooperation.

Understanding Future Networks and Technology – to identify cybersecurity challenges and opportunities posed by new technologies, and accelerate forward-looking solutions.

Building Cyber Resilience – to develop and amplify scalable solutions to accelerate the adoption of best practices and increase cyber resilience.

Initiatives include building a partnership to address the global cyber enforcement gap through improving the efficiency and effectiveness of public-private collaboration in cybercrime investigations; equipping business decision makers and cybersecurity leaders with the tools necessary to govern cyber risks, protect business assets and investments from the impact of cyber-attacks; and enhancing cyber resilience across key industry sectors such as electricity, aviation and oil & gas. We also promote mission aligned initiatives championed by our partner organizations.

The Forum is also a signatory of the Paris Call for Trust and Security in Cyberspace which aims to ensure digital peace and security which encourages signatories to protect individuals and infrastructure, to protect intellectual property, to cooperate in defense, and refrain from doing harm.

For more information, please contact us.

The COVID-19 pandemic is forcing governments, companies and societies to address digital risks in dramatic fashion. With or without rapid and sustained vaccine rollout, it is likely that many of these threats will endure for the foreseeable future. Business travel will not return at the scale of the past. Remote working will continue for many – as the recent declaration by Salesforce anticipates – especially as companies shutter their headquarters and move to more distributed work models.

COVID-19 is accelerating digital transformation, not least in middle- and upper-income settings. Cloud adoption will contribute to a wholesale redesign of enterprise networks. It is also intensifying concerns related to the protection of access to, and integrity of, data – a point made painfully clear with the Solar Winds hack. What makes the present moment exceptionally complex is that these dramatic changes are occurring during a period of intense geopolitical volatility. And while some level of uncertainty is inevitable, future pandemics, climate change and digital risks are not.

There are no easy answers to comprehensively protect ourselves from digital risks or build total digital resilience. Adaptability and agility are critical. The ability to anticipate digital risks – and following key principles of digital risk management – will surely separate the companies that will thrive in the digital age from those that will not.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

UN chief welcomes resolution to 27-year-old disagreement over renaming the former Yugoslav Republic of Macedonia

The US pipeline attack shows the energy sector must act now on cybersecurity. Here are 6 ways how

How trade-based money laundering works and its impact on world finances

Why is the World Health Organisation so much needed?

Remarks by Commissioner Lenarčič on the deployment of EU Medical Teams to Italy

The link between migration and technology is not what you think

UN space-based tool opens new horizons to track land-use on Earth’s surface

‘The clock is ticking’ on meeting the Sustainable Development Goals, says UN deputy chief

UN agencies call for more resettlement and end to detention of asylum seekers in Libya

NextGenerationEU: Commission gets ready to raise up to €800 billion to fund the recovery

Here are six bold ideas to accelerate sustainable energy innovation

Logo Mania: A call to action to our crisis of connection

Judges urge Security Council to serve interests of all UN Member States

Why financial services can kickstart Africa’s digital economy

Parliament approves seven-year EU budget 2021-2027

IMF: World cup and productivity

Connected Claims Europe on 18-19 September 2019, in association with The European Sting

A shocking new report reveals what we’ve done to the natural world

Bosnia and Herzegovina: EU allocates additional €3.5 million to support vulnerable refugees and migrants

Eurozone bank rescues ‘a la carte’ until 2015 then only bail-ins

EU’s tougher privacy rules: WhatsApp and Facebook set to be soon aligned with telcos

Nothing about us without us: how youth empowerment creates lasting change in the climate meltdown

It’s time for the circular economy to go global – and you can help

Dark spots on EU humanitarian aid spending

A reflection of health inequity in recent epidemics

Fuel crisis rapidly draining last ‘coping capacities’ of Palestinians in Gaza

MEPs hail minimum global corporate tax rate deal as historic

Closing VAT loopholes for sales through online platforms

COVID-19 Myths and Facts

A Sting Exclusive: EU Commission’s Vice President Šefčovič accentuates the importance of innovation to EU’s Energy Union

Brexit: €5 billion to help EU countries mitigate social and economic impact

Improvements to pension systems have made them better placed to deliver pensions

Easing ‘classroom crisis’ in Côte d’Ivoire, brick by (plastic) brick

State aid: Commission approves €1.1 billion Polish scheme to further support companies affected by coronavirus outbreak

ECB: The bastion of effective and equitable Europeanism keeps up quantitative easing

State aid: Commission approves German aid scheme to support airports affected by the coronavirus outbreak

Bertelsmann Stiftung @ European Business Summit 2014: Transatlantic Free Trade Agreement (TTIP) needs balanced approach

Green light for VAT overhaul to simplify system and cut fraud

What does strategy have to do with a platform approach?

This is the IMF’s latest take on the economy in 2020

EuroLat plenary in Panama: control of trade talks and fight against crime

Commission paralysed before the banking leviathan

Coronavirus: EU channels further support to Nepal and repatriates EU citizens

Vaccine hesitancy: a pregnancy related issue?

Impressions of China

Challenges in accessing Palliative Care from the perspective of Universal Health Coverage

4 innovative renewable energy projects powering Europe’s green future

South Korea once recycled 2% of its food waste. Now it recycles 95%

Is a deal over EU budget possible today?

EU agricultural production no more a self-sufficiency anchor

Partner countries get €3bn in loans to prop up economies affected by pandemic

Our food system is no longer fit for the 21st century. Here are three ways to fix it

IMF: The global economy keeps growing except Eurozone

The US banks drive the developing world to a catastrophe

Team Europe: Digital4Development Hub launched to help shape a fair digital future across the globe

UN chief pays tribute to Egypt’s role in avoiding ‘dramatic’ escalation in conflict across the Gaza-Israel border

3 ways to fight short-termism and relaunch Europe

More than speed: 5G could become the next big economic driver

Smart cities must pay more attention to the people who live in them

COVID-19 poses a dramatic threat to life in conflict zones

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s