The Impact of Emerging Technologies on GRC

Living in a digital-first world has increased our accessibility and ease of doing business. It has also increased liability as growing instances of cybercrime and human error have cost companies dearly.

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Tech optimism fuels innovation as startups and established vendors alike continue to design and evolve the products available on the market. It’s hard to imagine performing any business function without some reliance on a tech component, be it an app, device, or automated function. We live in exciting times, and many are curious about what lies around the bend.

The Role of Governance, Risk, and Compliance

The importance of IT within an organization continues to grow. As such, it’s beneficial - even crucial - to have a framework to align IT with business goals to ensure technological innovation and adoption within the organization are well-planned and executed. That’s where GRC comes in.

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Governance, risk, and compliance (GRC) serve as that framework. It’s an umbrella term that includes tools and methodologies to ensure governance and risk management are incorporated into all tech adoption. Consider GRC the overlap in the Venn diagram between tech implementation and legal and safety requirements.

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Designing and executing a well-thought-out GRC framework promises to increase efficiency while lowering non-compliance risk.

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Briefly put, the elements of GRC are:

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●?????Governance: including ethics and accountability, conflict resolution, resource management, social responsibility, and information transparency. Governance defines the roles of stakeholders within the organization.

●?????Risk management: including legal, strategic, financial, third-party, and security risks. Risk management helps an organization proactively mitigate risk, recover from incidents, and minimize losses (including financial and reputational damage).

●?????Compliance: including legal and regulatory requirements by governing bodies and internal company policies. Some compliance matters are industry-specific, including HIPAA, GDPR, and PCI DSS. Others are more generalized requirements for operating a business.

Emerging Technologies Shaping GRC

The allure of emerging technologies is strong, partly due to their promise to make it easier to conduct business at a faster pace. Yet, organizations cannot afford to overlook GRC when making business decisions about implementing emerging technologies.

Artificial Intelligence (AI)

No discussion about emerging technology is complete without including artificial intelligence (AI). Even the non-tech-savvy are talking about AI, making it just as likely that you’ll hear about it in a corporate all-hands meeting as a casual weekend dinner party.

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AI can be used to support GRC in pivotal ways:

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●?????Automating GRC processes using AI, machine learning (ML), and natural language processing (NLP), thereby reducing manual processes and the risk of human error. AI algorithms can scan and analyze vast data sets, including documents, policies, and legal frameworks, to help organizations interpret and adhere to legal requirements and legislation.

●?????Analyzing historical data to help proactively anticipate threats and mitigate risk. Organizations can learn from real-time data analytics and insights by eliminating manual batch processes to develop effective mitigation strategies. AI can also be used for predictive analytics.

●?????Monitoring and reporting to ensure compliance with legal regulations and internal policies. Continually monitoring data feeds, financial transactions, and the in- and out-flow of data helps identify anomalies or deviations. AI can also be used to generate compliance reports for more profound insight.

BYOD

With the widespread adoption (and retention) of hybrid and remote workforces, bring-your-own-device (BYOD) models have become commonplace. While not an entirely new concept, the impact of BYOD on business is significant. End users rely on mobile devices for virtually everything. When your personal device is also the portal to critical business processes and information, the impact on GRC cannot be ignored.

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BYOD comes with both supports and risks:

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●?????Increased collaboration, thanks to enhanced productivity and flexibility. End users can easily access information and communicate with one another thanks to the ability to use a device they’re already familiar with. This enables timely access to information, quicker decision-making, and more rapid response times.

●?????Data and security risks abound with BYOD, particularly if they lack the security controls that may otherwise be found on corporate-issue devices. To align with GRC requirements, organizations should ensure devices are encrypted, users have robust authentication methods, and mobile device management (MDM) platforms have a view on devices to safeguard organizational data. This is particularly crucial for end users with access to private customer data, as several legal regulations are in place to govern the handling, transmission, and storage of this information, and organizations can be held liable should it fall into the wrong hands.

Blockchain

By providing a decentralized and immutable ledger, blockchain claims to offer enhanced transparency, traceability, and trust. However, despite the potential, blockchain as a security solution remains in its infancy. GRC relies on secure data and valuable, timely insights to be effective, making blockchain a potentially useful technology approach.

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Blockchain impacts GRC for security in data storage and transmission, including:

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●?????Enhanced trust and transparency, as the blockchain, by nature, ensure data validity through auditable records. Data integrity and transparency improve governance by reducing fraud and increasing accountability. The blockchain can track and store audit trails and compliance activities, offering a single source of truth.

●?????Simplified regulatory compliance with smart contracts. This approach to contractual agreements enforces compliance and regulatory rules and triggers actions based on predefined conditions. Not only are manual processes reduced, but monitoring and reporting are enhanced.

●?????Scalability and interoperability challenges arise with blockchain, however. Organizations must assess these elements before moving critical processes to the blockchain and ensure legal and regulatory processes and frameworks are adapted to suit this approach, including legal requirements for data storage and formats.

Big Data and Data Analytics

In a data-driven world, big data and data analytics have become one of the most valuable aspects of doing business. This data's sheer volume and velocity mean organizations often struggle to keep up and utilize this data effectively.

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Effectively parsing, analyzing, and storing data tremendously impacts GRC. With analytics, businesses can gain deeper and more timely insights from large and diverse datasets, allowing them to identify patterns, correlations, and anomalies that might indicate potential risks.

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Automating all or part of this process means increasing proactivity while decreasing the risk of human error and improving decision-making. An organization can implement continuous monitoring to ensure compliance and risk mitigation and use predictive analytics to improve GRC strategies.

Identity and Access Management

To protect data and adhere to GRC guidelines, access control is paramount. Effective risk management relies on firm access controls, including the granting and revoking of access and user role and permission access.

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Identity and access management (IAM) is more than enforcing passwords. With emerging technologies, organizations can add another layer of authentication in an effort to protect users, networks, and data.

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●?????Multi-factor Authentication (MFA) requires two or more factors with which to authenticate identity before accessing resources including applications, accounts, VPN, and more. Secondary factors are often one-time passwords (OTP) like 4-8 digit codes sent via email or SMS. MFA is core to a strong IAM strategy.

●?????Biometrics are another emerging technology, using physical or biologic data to verify user identity. Many cellphones and laptops now come equipped with integrated fingerprint scanners, while some devices also offer facial recognition technology, making use of front-facing cameras and feature-specific facial analysis software.

●?????Zero Trust is an approach that requires all users (inside and outside of the organization) to be authenticated and authorized before accessing apps or resources. More than an initial authorization, zero trust means continuously validating the authenticity of a user to identify anomalies or potential security threats.

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GRC is essential within organizations when making business decisions about implementing emerging technologies. Learn more about professional certification in governance, risk and compliance in the Ultimate Guide to the CGRC.