How can you disrupt risk in an era of digital transformation?

Key findings from the survey

Digital transformation drives FDA advancements and offers opportunities for enhanced risk mitigation

Digital transformation drives advancements in FDA but also introduces new risks. This year’s survey shows that companies’ overall risk profiles are continuing to expand, with data protection and data privacy compliance risk registering the highest level of concern by survey respondents.

However, FDA advancements are enabling companies to gain business and risk insights faster and more accurately than ever before. This is demonstrated in the strong recognition of FDA’s effectiveness in managing various risks by the survey respondents.

Respondents continue to feel strongly about the wide-ranging benefits of FDA. This has helped reverse the trend of prior years, during which companies had held back on FDA investment. The average annual spend on FDA is 51% higher than what was reported in 2016.

Technologies are advancing; resources and skills continue to be in demand

This year’s results show an increase in the use of advanced FDA technologies by companies from the prior two surveys. Respondents also indicated that additional investments in emerging technologies are on the horizon. Thirty-nine percent of respondents reported that they are likely to adopt robotic process automation within the next year. Further, 38% plan to adopt artificial intelligence.

FDA technologies and techniques need to be implemented by people who have the right business domain knowledge, data analytics or data science expertise, and technical skills. Yet, only 12%–13% of respondents feel that they have the right mix of FDA expertise.

FDA integration and governance are necessary for success

The cross-functional collaboration needed to implement effective FDA processes continues to be a challenge for more than 50% of respondents. Implementations tend to be decentralized in these companies; they are also often understaffed. Improving implementation and gaining leadership support and appropriate funding will drive even more value from FDA. 

Nearly half of respondents indicated the need to improve management’s awareness of the benefits of FDA. Better governance will directly improve management support and awareness, and will also facilitate collaboration that leads to better integration of data sources and improved information sharing.

The application of FDA within data protection and data privacy compliance is paramount

Around the world, countries are enacting data protection and privacy regulations that present real compliance challenges for companies. The EU’s General Data Protection Regulation (GDPR), which became effective in May 2018, is complex, applicable to companies globally, and has significant potential financial penalties. Yet at the time of our survey, only 33% of respondents had a plan to address GDPR compliance. Another 39% of respondents indicated that they are not at all familiar with the GDPR.

Forty-two percent of respondents believe that data protection and data privacy regulations have a significant impact on the design and use of FDA. FDA can be a valuable part of achieving compliance with data protection and privacy regulations, as one tool in an organization’s information governance program. On the other hand, companies that incorporate data protection and data privacy compliance in their FDA strategies can gain a competitive edge over those that choose to avoid FDA, due to the cost of compliance and regulatory concerns.

Realizing the full potential of FDA and transforming the risk functions 

An effective FDA strategy will lead to better risk management and increased business transparency. To achieve the full potential of FDA, companies should aim for better integration; leverage the right technologies, data and people; and secure strong leadership support. 

With the right efforts, investment and leadership support, the confluence of data and technology will better address businesses’ needs to manage legal, compliance and fraud risks. Companies can extend FDA’s benefits beyond basic risk functions while increasing business transparency and improving operational efficiency. In doing so, the risk function can continue to protect the business, while also offering insights that can inform business opportunities and strategy.