Digital risk officers will require a mix of business acumen and understanding with sufficient technical knowledge to assess and make recommendations for appropriately addressing digital business risk
One-third of large enterprises engaging in digital business models and activities will also have a digital risk officer (DRO) role or equivalent, says Gartner.
By 2020, 60 percent of digital businesses will suffer major service failures due to the inability of the IT security team to manage digital risk in new technology and use cases. IT, operational technology (OT), the Internet of Things (IoT) and physical security technologies will have interdependencies that require a risk-based approach to governance and management.
Digital risk management is the next evolution in enterprise risk and security for digital businesses that are expanding the scope of technologies requiring protection.
"Digital risk officers will require a mix of business acumen and understanding with sufficient technical knowledge to assess and make recommendations for appropriately addressing digital business risk," said Paul Proctor, vice president and distinguished analyst at Gartner. "Many traditional security officers will change their titles to digital risk and security officers, but without material change in their scope, mandate, and skills they will not fulfill this role in its entirety."
The mandate and scope of a DRO is very different than a chief information security officer (CISO) and in many organizations the CISO role will continue with similar scope as in 2014. The DRO will report to a senior executive role outside of IT such as the chief risk officer, chief digital officer or the chief operating officer. They will manage risk at an executive level across digital business units working directly with peers in legal, privacy, compliance, digital marketing, digital sales and digital operations.
The IT security role remains relevant and vital. However, many CISOs will evolve into DROs as they begin to own or form effective partnerships with digital security teams managing other forms of technology. IT security leaders may continue with their assigned responsibilities that report to the DRO. As physical security management becomes increasingly digital, this will include the physical security teams as well.
The impact of this new structure of digital risk governance and management on IT and IT security operations is expected to be minimal, particularly in those enterprises that have already appointed a chief risk officer. However, the potential impact on the culture of IT and IT security teams is major.
IT, OT, IoT and physical security form a new superset of technology that challenges the ability of existing organizational structures, skill sets and tools to consistently and adequately assess, define and manage technology risks. Simply expanding the portfolio of the existing IT security team to include technology risk for all Internet-aware technology is not viable. New and existing technology managed outside of the IT organization requires skills and tools beyond the competence of the IT security team in its current responsibilities, and the teams currently involved in management of these technologies are culturally distinct from the IT organization.