The Internet of Things (IoT) is here to stay and its influence will only increase say experts. StrategicRISK went to the market to find out what risk managers see ahead and tips for staying ahead of the game.
As the fourth industrial revolution continues to take hold, the IoT is set to present new challenges and opportunities for risk managers in all types of businesses.
A recent report from Lloyd’s noted: ”As the IoT emerges and early adopters experiment and innovate, its opportunities and use cases will become more evident. However, with IoT’s embeddedness of connected chips, sensors, receivers, and actuators across different sectors and within assets of vastly divergent functionalities and values, questions arise about the type of systemic challenges that may follow.
“Questions also arise about the implications of the risk landscape resulting from the changing nature of error, threat, harm, vulnerability, and exposure. It is important to improve our understanding of what those changes will mean for the ways in which risk is assessed and managed, and also for the ways in which challenges of liability and attribution are resolved.”
Gareth Byatt, principal consultant at Risk Insight Consulting and APAC Ambassador for the IRM says: ”I agree with the main thrust of the Lloyds report, in that, to quote the summary on the Lloyds website: “the Internet of Things (IoT) has the potential to increase complexity and amplify risk, but it could also enable more innovation”. I would stress the latter part of this statement and focus on the opportunity. The IoT is already leading to all sorts of innovation, and material performance improvement, in just about any industry you can think of. ”
Cynch’s chief wayfinder, Susie Jones, says risk managers should ensure they are at the forefront of innovation in order to best manage and mitigate any potential risks. “I recommend risk managers remain curious about what their own enterprises are investing in. With more and more investment and experimentation involving IoT devices being made by businesses large and small, it is critical that the associated risks be assessed and managed from idea phase through to production.”
Byatt agrees: ”Risk managers should ensure that they are closely involved in the IoT initiatives that their organisation is undertaking. They should use the tools in their Risk toolkit to help ensure their management make good strategic and tactical decisions to ensure their implementation of the IOT is a demonstrable and measurable success.”
Byatt adds cybersecurity of IoT is one area that needs more focus. ”There are undoubted and well-documented cybersecurity threats that need to be addressed when implementing an IoT strategy. Risk managers can and should position themselves as a valuable partner to their business and management teams to ensure that the IoT is adopted in the best way, and that cybersecurity is appropriately addressed by working closely with their IT team.”
”Risk managers can only be involved in this process if they know the experimentation is going on in the first place. I suggest they reach out to their research teams, development teams, and strategy leaders,” says Jones.p
”Ask everyone what new things they are working on, and when they hear about new initiatives, ask what they can do to help. By getting involved they will become part of the solution - plus it can be really interesting!” adds Jones. ”