There is no doubt that the digital world has taken over the world. Our lives are increasingly being controlled by technology and we are unable to think about anything else. We used to read newspapers, listen to broadcasts and catch up with each other in person — now we can get all of our news from a tablet or smartphone. The way we keep in contact has also changed drastically and social media has become one of the most important sources of information in our lives. However, there is also a downside to this kind of technology. For example, if you have installed a great antivirus app on your mobile device which prevents you from receiving viruses on it, but then discover that it wasn’t updated lately, then you might get infected before long! And no matter how carefully you handle your financial data, chances are it will be hacked sooner or later if some rogue hackers manage to get into your banking account.
Transparency and Visibility
Transparency and visibility are among the most important attributes of trust and security. The more transparent a company is about its financial health, the more likely it is that investors will believe in the integrity of its claims and make smart investment decisions.
The financial implications of digital trust and security are tremendous.
First, companies can begin to show their true financial health by sharing information with investors on a regular basis. This allows investors to make informed decisions about how much money they want to put into a particular investment opportunity or what kind of risk they are comfortable taking on.
Second, transparency leads to effective data governance. If companies are transparent about their financial state, they will have better control over their data assets than if they were not transparent at all. This means that you can identify risks earlier and address them before they become big problems for your company.
Trust and Confidence
Trust and confidence are the two core requirements of any organizational or personal relationship. They are the foundation on which we build trust, but they are also important to maintain.
Trust is a fundamental element in any relationship, whether it’s between family members, friends or colleagues. Without trust, no relationship can survive for long. It’s not just about whether you trust someone; it’s about whether you have faith in them.
Confidence is also an important part of any relationship. It’s defined as being secure when it comes to something that you’re doing or saying, especially when facing potential criticism or adversity. You need confidence in order to be able to do your job well and give yourself 100% on any given day.
Reputational impact
Digital trust and security are becoming increasingly important to both the financial and non-financial sectors. The reputational impact of cyber attacks on financial institutions is the most significant risk facing the industry. This can have a significant effect on the reputation of an organisation and its ability to raise capital from investors.
Market Impact
The financial impact of digital trust and security is a multi-billion dollar industry. According to the research firm Gartner, by 2020, the cybersecurity market will be worth more than $100 billion. Gartner predicts that the cybersecurity industry will grow at an annual rate of 4% through 2022, with a compound annual growth rate of 7%.
The rise of cybercrime has been one of the biggest threats to businesses and consumers in recent years. As cyberattacks become more sophisticated and targeted, it’s becoming increasingly difficult for businesses to protect themselves against them.
Legal Liabilities
With the rise of digital trust and security, many legal liabilities are becoming more complicated. In particular, the law has continued to evolve in the area of data privacy and security. It’s now possible for a business to face significant liability if they don’t take steps to protect customer data.
For example, in the US, it’s illegal for an employer to ask employees for their passwords or PIN numbers without their permission. This is because it breaches the Digital Millennium Copyright Act (DMCA). The act prohibits businesses from circumventing DRM restrictions that prevent copyright material from being downloaded or shared in any way that isn’t authorized by the rights holder.
This means that if your website has been hacked or somebody uses your password on another site without your knowledge, you could be liable for copyright infringement — even if you’re not aware of it happening.
Operational Impact
The operational impact of digital trust and security is significant.
Policies, procedures, internal controls and governance will have to be updated and refreshed to reflect the changes in the way consumers are interacting with businesses. The focus on digital marketing will grow as more consumers turn to technology to make purchases and interact with businesses. Digital revenues will therefore increase as a percentage of total revenue, and the number of transactions conducted online will increase dramatically.
Those who fail to adapt their business models may find themselves out-competed by competitors who are able to provide a better customer experience through digital channels.
The industry needs to consider the implications of digital trust and security and how it relates to managing the security risk mitigation process. The level of risk is a function of the likelihood that a breach of security will occur and the potential impact to those impacted if that breach occurs. The financial ramifications of such a breach can be significant. For example, a 2013 survey from Deloitte showed that seven percent (7%) of companies actually had suffered an IT breach within 12 months prior to being surveyed for the study, which affected more than 500,000 individuals. Instead, many businesses are required to disclose breaches of information occurring on their network regardless of their actual impact or likelihood for impacting any data subjects
Digital transformation will affect businesses in many different ways, including the financial implications of digital trust, security and privacy.
Author: AKSHR
