In the rapidly evolving digital age, businesses are facing a dual challenge: managing the rising cyber and digital technology risks while capitalizing on the potential of Generative AI (GenAI). PwC’s 2023 Global Risk Survey, involving over 3,900 business and risk leaders, sheds light on this dynamic landscape, revealing that while 60% see GenAI as a significant business opportunity, concerns about cyber and digital risks remain at the forefront.
Cyber risks vs. GenAI opportunities
The survey highlights a clear dichotomy in the business world’s perception of digital technology. On one hand, there is a heightened sense of vulnerability, with 37% of respondents expressing concern over cyber risks and 32% over digital technology risks. On the other hand, the emergence of GenAI is viewed optimistically, seen as a key driver for business transformation and growth.
Despite inflation being a pressing issue, with 39% of leaders feeling seriously exposed, it is the cyber and digital technology risks that are perceived as more immediate threats. This sentiment is echoed by Sam Samaratunga, Global and UK Head of Risk Services at PwC UK, who emphasizes the need for organizations to adapt and transform using new technologies, acknowledging the inherent risks but also the necessity for taking them to achieve progress.
Technological transformation and risk management
The survey underscores a vital link between embracing emerging technologies like GenAI, machine learning, automation, cybersecurity, and cloud computing, and the consequent shift in organizational risk profiles. Businesses are increasingly relying on these technologies to add value and transform operations, which in turn, alters their exposure to potential threats.
57% of the surveyed leaders cite preparation for technology investments, including GenAI and cloud technologies, as a primary reason for reassessing their company’s risk landscape. This pivot towards technology-driven risk management highlights a paradigm shift in how businesses perceive and handle risk.
Interestingly, the survey also identifies a group termed ‘Risk Pioneers,’ constituting 5% of the respondents. These are entities that lead by viewing risk as a value creation opportunity rather than a mere threat. They are 1.8 times more likely to see GenAI as a comprehensive opportunity and 1.6 times more likely to proactively take risks to create opportunities, in contrast to adopting safe or low-risk strategies.
The road ahead: Adapting to technological change
The survey results point towards a pressing need for businesses to adapt their risk management strategies in light of technological advancements. Only 10% of firms are utilizing advanced and predictive analytics or continuous adaptation and innovation techniques in risk management. A significant majority remain at more basic stages of technology application, with only 24% using fundamental technology and data tools or having established procedures for risk management.
Simon Perry, Markets & Services Leader – Risk at PwC UK, concludes that the era of a benign risk environment is over, largely due to the accelerating pace and impact of technology change. He stresses that intelligently navigating these risks, powered by technology and framed by growth and opportunity, is crucial for businesses to adapt, reinvent, and thrive in this constantly changing world.
While cyber and digital risks are a growing concern for businesses in 2023, the advent of GenAI presents new avenues for innovation and growth. The challenge for businesses lies in balancing these risks with the opportunities presented by technological advancements, ensuring both protection and value creation in an increasingly digital world.