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Hi, enjoy this weeks curated risk and business updates.
Going forward, our news coverage and editorial discussions will provide increased focus on key technology trends that all organizations need to consider in identifying emerging risks and trends. Five of those trends are discussed below and we will cover an additional five next week.
Human Interaction with AI: News of Neuralink’s successful brain implant that is intended to allow individuals to control devices through their thoughts is one of the most visible developments of the continuing evolution of Human and AI interactions. AI and other related technology entwinement with humans continue to create new opportunities, ethical concerns and risks. AI continues to be more integrated in daily activities, art and other creative fields, education, employment and more. Understanding the social, emotional and economic impact of AI/ human interactions while ensuring systems are fair, transparent and ethical systems will increasingly challenge businesses in 2024.
Low Code/ No Code Software: Low code/ no code platforms and tools are increasingly allowing non-engineers to develop software and analyze data without coding skills, potentially increasing speed of development, reducing costs and further democratizing IT in corporate environments.
Quantum Computing can potentially solve problems traditional computers can’t such as optimizing large systems and factoring large numbers - meaning current security cryptography may be vulnerable) Quantum computing engineering issues have long been an obstacle that are increasingly being solved. The integration of quantum and classical computing systems is being used to solve complex problems and Quantum-as-a-Service (QaaS) platforms are making quantum computing capabilities more broadly available - companies need to pay attention to the related technical, ethical, and regulatory challenges.
Post-AI and Quantum Computing Cybersecurity: Cybersecurity challenges of the past may seem trivial in light of new threats. Overall cyber attacks doubled in 2023 per Crowdstrike CEO George Kurtz and generative AI has led to a massive increase in phishing attempts and other social engineering related attacks. AI, ML, Quantum computing, cloud computing, geopolitical threats and talent availability and skills gaps keep cybersecurity in the forefront of technology challenges.
AI Risk Management: Most board members, executives and business managers cannot explain AI, how it works, how AI systems are trained and are therefore unable to anticipate systems strengths, weaknesses, key risks and concerns. According to Gartner Group, this will drive adoption of a “comprehensive AI trust, risk, security management (TRiSM) program”, which will help “ensure AI systems are compliant, fair, reliable and protect data privacy.”
Request more information on DelCreo’s Risk Universe and risk assessment services.
As a reminder, here are our Risk Universe categories that we leverage to tackle and understand risk which include:
External Risk
Governance Risk
Strategic Risk
Product Risk
Business Operations Risk
Legal & Compliance Risk
Financial Risk
Technology Risk
These high-level risks are fairly consistent between different companies and risk profiles.
We leverage our understanding of risk maps and risk universes to better advise our clients in strategic business decisions and to optimize the management of risk throughout the enterprise.
Weighing the Risks
Weekly Highlights
Executive emphasis on management of risk accompanying growth and interest in AI is trickling down and out to state and international administrations following Biden administration’s executive order surrounding AI
Economic indicators are less promising as inflation persists and Wall Street loses confidence in the possibility of a “soft landing”
Risk Universe Weekly Updates
External Risk
Rethinking the Prospects of a ‘Soft Landing’
Recent negative CPI report puts a damper on Wall Street hopes that inflation will slowly settle down to Fed 2% goal and reignites concerns that inflation will continue to stay elevated
Executive teams should monitor economic forecasts and adjust business plans as forecasts and shared consensus shifts
Governance Risk
Mitchell Baker logs off for good as CEO of Firefox maker Mozilla
Long-time Mozilla CEO leaves her role as after almost 25 years in total with the company
This shift has brought attention to Mozilla’s succession planning, executive compensation practices, cost control measures and seeming lack of strategic focus. Mozilla hasn’t released compensation details of new CEO Laura Chambers
Companies across various industries are citing or implying, advances in AI are driving thousands of job cuts, finance is an area that will be heavily affected
However, many changes and uses of AI are aiming to improve efficiency of existing roles rather than fully cutting positions
Using AI as an augmentation rather than a replacement signifies a development in management thought processes and could mitigate disruption to workers in the wake of AI adoption
Strategic Risk
After rejecting buyout offer, Macy’s is rolling out more private brands to boost its business
Macy’s continues to lean more heavily into private brands and is seeing positive financial results even as other retailer giants like Amazon are shifting away
CEO Tony Spring is confident in the success of Macy’s and their utilization of private brands to drive that success as the retailer spurns offer to take the company private
Risk professionals should continue to monitor where high concentrations exist in strategic plans and revenue lines to best monitor and mitigate risk related to high risk/high reward strategies
Product Risk
Microsoft, OpenAI say U.S. rivals use artificial intelligence in hacking
Advances in AI code-producing capabilities is a double-edged sword as international hacking groups utilize AI for research of vulnerabilities and create programs meant to aid in security measure “circumvention”
Managers and professionals utilizing AI should monitor how use of new technologies opens up organizations to further risk
Legal & Compliance Risk
California proposes government cloud cluster to sift out nasty AI models
Potential California legislation introduced by Democrat, Scott Wiener, could provide much needed risk management procedures and structures by centralizing a “AI research cluster” for any interested developers or parties
These regulations are echoing other jurisdictions with federal considerations being made in the US, and the EU already in the process of issuing AI-governing legislation
This move represents a shift in priorities as regulators look to get ahead of boom in new technology and accompanying risks
Technology Risk
Understanding AI And ML In The Real-Time Economy
Management teams are scrambling to find relevant use-cases for developing AI frameworks but may lack the understanding, internal structure, and opportunities to effectively utilize AI
AI and ML-based technologies are directly reliant on large and ever changing data sets which require continuous updates and maintenance to be optimally useful