Washington, D.C., Feb. 16, 2023 — FTI Consulting, Inc. (NYSE: FCN) today announced findings from its Technology segment’s study of digital insights and risk management trends, which revealed that digital risk is rapidly surpassing other areas of corporate risk as the primary business concern and that data has become inextricably linked to business success.
Based on a survey of senior-level and C-suite executives around the world and supplemental one-on-one interviews between analyst Brad Blickstein and senior leaders at large corporations, the report, The Most Valuable, Vulnerable Commodity: Data Establishes a New Era of Digital Insights & Risk Management, provides a close examination of how organizations around the globe are responding to, managing and leveraging the modern data paradox.
When asked about how they expect the level of risk and activity to change across key digital risk categories, including privacy, information security, the expanding data footprint, disputes, investigations, regulatory compliance and more, 63% or more of respondents indicated that operational and/or compliance implications will increase across every area. Many believe both operational and compliance risk will increase, especially in data privacy, security, breaches and data quality, given tightening regulatory enforcement.
“By and large, data has become a highly valuable and vulnerable commodity,” said Sophie Ross, Global Chief Executive Officer of FTI Technology. “It carries tremendous risk, especially when not managed properly. As global experts in digital insights and risk management, every day we see the impact data can have across many areas of a business. The degree to which organizations are experiencing increased costs, complexities, compliance exposures, data breaches and investigations challenges — all as a result of an expanding data footprint — is staggering. This report’s findings reiterate the need for organizations to take digital risk seriously and establish flexible approaches that simultaneously fill gaps and advance business objectives.”
Key survey insights include:
Top Risk Concerns
- More than two-thirds of respondents ranked data privacy as one of their top three concerns
- Additional risk areas that ranked as a top-three issue included information security and data breaches (59%), data quality (37%) and regulatory compliance and inquiries (25%)
- 90% of data privacy professionals have experienced increased data-related risk due to hybrid work environments
- 77% of data privacy professionals said data breaches have become more expensive in the last year
- 76% experienced a significant or moderate increase in regulatory activity over the past year
- Only 26% reported that they had a fully proactive approach to monitoring compliance risks; however, 75% of risk and compliance professionals are regularly or occasionally using AI to conduct proactive compliance monitoring, IP remediation and other risk management activities
Information Governance Challenges
- 41% of respondents stated that data is being shared on devices and through systems that are not sanctioned or covered within the organization’s policies
- More than 70% of respondents with information governance responsibilities said the cost of maintaining strong information governance has grown more expensive over the last year
- 76% of information governance decision makers reported that the increased use of collaboration tools and cloud-based applications has created significant or moderate information governance challenges (one-third indicated “significant”)
Dynamic Data and Emerging Data Sources
- 85% said the rising variety and volume of data types are driving increased cost or risk, with one-third of those saying the increases have been “significant”
- For more than half, the complexity of data sources — and the cost and effort associated with accessing, collecting and producing data for disputes and investigations — has increased
- 66% of chief legal, compliance and risk respondents plan to invest in technology to address risks from emerging data sources
Impacts of Advanced Technology
- Only 6% are not considering any blockchain and digital assets solutions
- 44% are considering blockchain technologies for supply chain issues, while another 38% are considering them for payments and transactions
- Most respondents are not taking meaningful steps to prepare for the risks associated with blockchain and digital assets; yet 78% said that they are concerned about volatility, regulation and other related risks
- 91% of chief technology officers and chief financial officers agree that risk management related to blockchain and digital assets requires highly technical expertise
Jake Frazier, a Senior Managing Director and the global leader of the Information Governance Privacy & Security practice within FTI Technology, said, “When effective policies, strategies and infrastructure are in place, there is tremendous value to be mined from corporate information. The stakes are high, but once organizations establish resilience against digital risk, they can begin to leverage their data to drive growth and innovation.”
FTI Technology’s digital insights and risk management experts provide a broad range of consulting and services that help companies address critical areas of digital risk, including e-discovery, data privacy and information governance, compliance and risk and legal operations. Across practice areas, FTI Technology helps clients address a broad range of complex challenges, manage data and guard against a myriad of threats, while balancing innovation and business needs.
As an extension of this work, FTI Technology also established a data innovation lab, designed and powered by global experts in emerging data sources, disputes, investigations, digital forensics, information governance, data privacy, compliance and digital assets, to drive interdisciplinary efforts to connect, enrich, visualize, analyze and act on digital information. These teams maintain dedicated environments to research, engineer, test and refine solutions to mitigate risk and meet the needs and challenges attached to inbound, outbound, in-place and dynamic data.
Demographics and Methodology
During July, August and October 2022, a third-party provider distributed quantitative surveys to 150 participants across North America; Europe, the Middle East and Africa; Asia Pacific; and Latin America. More than 90% of respondents were senior- or executive-level leaders, with primary or final decision-making authority over the issues covered in the survey. They spanned titles including chief data officer, chief information officer, chief information security officer, chief technology officer, chief privacy officer, chief legal officer, general counsel, chief risk officer, chief compliance officer, chief financial officer and chief marketing officer. Roughly two-thirds of participants work in organizations with more than 1,000 employees, with 25% from companies with more than 5,000 employees. In addition to the survey, Brad Blickstein of the Blickstein Group conducted in-depth one-on-one supplemental interviews in July and August 2022 with eight U.S.-based executives, which provided qualitative analysis and insight alongside the quantitative data from the surveys.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organisations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 7,500 employees located in 31 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $2.78 billion in revenues during fiscal year 2021. In certain jurisdictions, FTI Consulting’s services are provided through distinct legal entities that are separately capitalised and independently managed. For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting),