Top 5 Technology Risks to consider in 2023

In the ever-evolving landscape of technology, it is crucial for businesses and individuals to be aware of the potential risks associated with new advancements. We have generally observed that regulation seldom keeps pace with technology advancements. However, for new technology to promulgate extensively, it is important to understand the risks and design mechanisms to mitigate them.

Strategic Relevance

  • Artificial Intelligence (AI) Bias: As AI becomes increasingly integrated into various sectors, the risk of bias within AI algorithms grows. Organizations must address this risk by ensuring transparency, accountability, and diversity in AI development to avoid unintended discrimination or unfair outcomes. While human decision making is subject to bias too, the scale at which AI operates is massive resulting in impact which is far greater than human decision making. Secondly, machine learning reinforces biases if the training data is biased, and lack of transparency makes detection difficult.
  • Cybersecurity Threats: Cybersecurity continues to be a pressing concern as technology advances. With the proliferation of IoT devices, cloud computing, and remote work, organizations face an increased risk of data breaches, ransomware attacks, and other malicious activities. To mitigate these risks, businesses should prioritize robust cybersecurity measures, including encryption, regular vulnerability assessments, and employee training. State-sponsored hacking represents a significant and evolving technology risk. As nation-states engage in cyber warfare and espionage, the implications for businesses, governments, and individuals are far-reaching.
  • Privacy and Data Protection: With the rise in data-driven technologies, privacy and data protection are critical considerations. Organizations must navigate complex regulations, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), to ensure compliance and protect user data. Implementing privacy-by-design principles and obtaining informed consent from users are essential steps in mitigating these risks.

Challenges and Opportunities

  • Ethical Use of Emerging Technologies: As AI based emerging technologies like autonomous vehicles, blockchain, and virtual reality gain traction, ensuring their ethical use poses challenges. Organizations need to establish guidelines and frameworks to address the potential ethical dilemmas associated with these technologies. Simultaneously, embracing ethical innovation can create opportunities for competitive differentiation and building trust with customers.
  • Managing Digital Transformation: Digital transformation initiatives bring significant opportunities for organizations, but they also introduce risks. The challenges lie in managing the complexity of implementation, ensuring proper change management, and upskilling the workforce to adapt to new technologies. By overcoming these challenges, organizations can achieve improved operational efficiency, enhanced customer experiences, and increased competitiveness. As emerging technologies like 5G, Internet of Things (IoT), and artificial intelligence become more prevalent, they present new attack surfaces for state-sponsored hackers. Proactively identifying and addressing the security vulnerabilities of these technologies is essential to mitigate future risks. The use of artificial intelligence in offensive cyber operations is a growing concern. State actors may leverage AI to automate attacks, improve reconnaissance capabilities, or develop sophisticated malware. Monitoring AI-related developments in the cyber threat landscape and developing AI-powered defense systems will be crucial for future cybersecurity efforts.
  • Regulatory Compliance: Rapid technological advancements often outpace regulatory frameworks. Businesses face the challenge of adapting to evolving regulations and compliance requirements while also maintaining innovation and agility. Staying updated on regulatory changes and fostering collaboration between policymakers and industry leaders can help organizations navigate these challenges successfully. Leading technology experts have been calling for governments to regulate technology and usage, to encourage adoption and trust in systems.

Future Trends

  • Quantum Computing Security: As quantum computing continues to progress, traditional encryption methods may become vulnerable to attacks. This risk necessitates the development and adoption of quantum-resistant cryptographic solutions to ensure the security of sensitive information in the future.
  • Artificial General Intelligence (AGI): AGI refers to highly autonomous systems that outperform humans in most economically valuable work. While AGI holds enormous potential, it also presents risks such as job displacement and the concentration of power. Preparing for the societal and ethical implications of AGI requires proactive research, policy development, and collaboration between technology leaders, policymakers, and the public.
  • Data Governance and Accountability: As data becomes an increasingly valuable asset, the need for robust data governance and accountability will intensify. Organizations must adopt comprehensive data management strategies, including data quality control, ethical use frameworks, and transparent data sharing practices to build trust with stakeholders.

Best Practices

  • Embrace a Culture of Cybersecurity: Implement a comprehensive cybersecurity strategy that includes employee training, regular security assessments, and incident response plans. Foster a culture of cybersecurity awareness and accountability throughout the organization. Developing comprehensive incident response plans is crucial to minimize the impact of state-sponsored cyberattacks. Organizations should establish clear protocols, define roles and responsibilities, conduct regular drills, and maintain off-site backups to facilitate timely recovery.
  • Prioritize Privacy by Design: Embed privacy considerations into the design and development of technologies and systems. Implement privacy impact assessments, adopt privacy-enhancing technologies, and obtain explicit consent from users before collecting or processing their data.
  • Stay Informed and Collaborate: Technology and cybersecurity leaders should stay updated on emerging trends, regulatory changes, and best practices. Engage in industry collaborations, partnerships, and knowledge sharing to proactively address technology risks and build resilient systems.
    Similarly, Governments and international organizations should foster cooperation and information sharing to address state-sponsored hacking. Collaborative efforts can include the establishment of cyber norms, diplomatic negotiations, joint threat intelligence sharing, and coordinated response mechanisms.
Maya Ramchandran
Partner
Ernst & Young LLP

Disclaimer: The views expressed in this feature article are of the author. This is not meant to be an advisory to purchase or invest in products, services or solutions of a particular type or, those promoted and sold by a particular company, their legal subsidiary in India or their channel partners. No warranty or any other liability is either expressed or implied.
Reproduction or Copying in part or whole is not permitted unless approved by author.

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