There's one non-traditional risk companies need to pay attention to: insider threats. A threat like this can come from employees, contractors, or business partners who have legitimate access to the company's data but misuse it, either maliciously or unintentionally. It's possible that a disgruntled employee will leak sensitive financial info to a competitor, causing substantial damage to the company's reputation and market position. Meanwhile, a well-meaning employee might fall victim to a phishing attack, giving cybercriminals access to critical systems. The best way to mitigate these risks is to implement stringent access controls, conduct regular security awareness training, and use monitoring tools to detect suspicious activity. It's important to understand and address insider threats to keep a company safe.
One non-traditional risk that companies should pay attention to is cybersecurity threats that are known to originate from third-party vendors. Here’s why: Many companies rely on third-party vendors for some of their services like software and components. It can expose you to cybersecurity risks if the third parties do not have any measures against these threats. Such loopholes in smaller companies result in data breaches, service disruptions or sometimes regulatory non-compliance for the main company. Modern supply chain networks involve several interconnected vendors and are complex. It signifies that each vendor is a potential entry point for cyber threats. Here is how one can reduce the risk: Conduct detailed research of all the vendors before connecting with them and doing the same on a regular basis after that. Be open to communication and express your expectations when hiring vendors. Raise cybersecurity awareness by training and collaborating with best practices for the vendors.
Data privacy is one non-traditional risk that companies should pay more attention to. In today's digital age, breaches in data privacy can lead to significant legal, financial, and reputational damage. For instance, I once worked with a company that underestimated the importance of securing customer data. A breach occurred, resulting in a loss of customer trust and substantial legal fees. This experience taught me that proactive measures in data security are not merely an IT concern but a critical aspect of risk management.
As a business litigation attorney, one non-traditional risk I see companies overlook is failing to properly vet employees and third-party contractors. Not performing background checks or enforcing strong contracts can lead to legal issues, data breaches, and damage to company culture. For example, we had a client who hired a contractor to develop software without a non-disclosure agreement. The contractor ended up using proprietary data to create a competing product, resulting in an expensive lawsuit. Conducting due diligence on employees and contractors, and ensuring strong contracts are in place, could have prevented this. Another risk is neglecting to get proper counsel on business decisions. One client acquired another company without consulting lawyers first. We later found the acquisition included several undisclosed liabilities that ended up costing the client over $500K. Consulting attorneys on major business moves can identify risks not apparent to company executives and save money in the long run. Small investments in risk management, like background checks, contracts, and legal counsel, may seem unnecessary but can have significant payoffs by avoiding costly problems down the line. Companies should take a proactive approach to risk and seek guidance from experts whenever possible. An ounce of prevention is worth a pound of cure.
One non-traditional risk that companies should pay more attention to is the growing threat of fraud and scams, particularly account takeover and authorized push payment fraud. These types of fraud have been increasing at alarming rates, with the Federal Trade Commission reporting a 49% rise in scams in 2022 compared to the previous year, resulting in nearly $8.8 billion in consumer losses. Fraud protection is critical not only for maintaining payment system integrity but also for managing customer experience and protecting against reputational risk. Companies need to improve their fraud detection and prevention strategies by employing multiple authentication methods, such as biometric identification and real-time monitoring using AI and machine learning. Additionally, maintaining open communication with customers about fraud prevention measures can foster confidence and improve the overall customer experience. Addressing this risk is crucial because the implications of fraud extend beyond financial loss to include potential damage to a company's reputation and customer trust. As fraud techniques evolve, companies must stay vigilant and continuously adapt their risk management practices to safeguard against these threats.
Companies should pay more attention to several non-traditional risks, with Brand Hijacking being the most prevalent threat: Brand Hijacking: Threat actors increasingly misuse or hijack brand names for monetary gain. This often involves impersonating the company on social media to spread false information or conduct phishing attacks. Another common tactic is typosquatting, where attackers create domains that closely resemble the official website, tricking customers into believing they are legitimate and scamming them. These methods are widespread and particularly dangerous. User Feedback: Negative reviews on platforms like Google Reviews, YouTube, Yelp, and other forums can severely impact consumer perception and sales. Social media influencers and bloggers also play a significant role in shaping consumer opinions with their posts, reviews, and comments, whether positive or negative. Customer Expectations: Today's consumers often use social media to amplify their issues with a brand. Even minor problems can go viral, damaging the company's image. To prevent this, companies should monitor social media channels and maintain transparency with their customers regarding any issues. In conclusion, companies must be vigilant about non-traditional risks such as brand hijacking, user feedback, and heightened customer expectations on social media. Addressing these risks proactively through continuous monitoring and transparent communication can help safeguard a company's reputation and maintain consumer trust.
One non-traditional risk often overlooked is the impact of employee burnout. At PinProsPlus, noticing early signs of burnout and addressing them through wellness programs and flexible schedules boosted morale and productivity. This proactive approach not only improved team well-being but also reduced turnover and fostered a more resilient workforce.
Greater attention should be paid to the more non-traditional risks to employee mental health and well-being, which can result in a loss of productivity, increased turnover and increased cost due to health benefits. Organisations have a crucial role in providing overall mental wellness programmes and making necessary resources available to help employees cope with stress. Initiatives like flexible working hours, agency counselling, and wellness workshops can significantly contribute to employees' well-being and job satisfaction. It helps prevent problems, and it doesn't just safeguard against mental health risks. It leads to a healthier, more engaged, productive workplace and a more prosperous, sustainable organisation.
One non-traditional risk companies should focus on is the rapid obsolescence of skills. In my transition from software to real estate, I've seen how quickly technology can make certain skills outdated. Companies need to invest in continuous learning for their teams. In real estate, we're constantly adapting to new market analysis tools and digital transaction platforms. It's not just about the tech itself, but about cultivating a mindset of adaptability. Failing to do so can leave a company vulnerable to more agile competitors, much like an outdated property in a modernizing neighborhood.
Co-Founder and Managing Director at Auckland & Beyond Tours (https://aucklandandbeyond.co.nz/hobbiton-tour-from-auckland)
Answered 2 years ago
One non-traditional risk that companies should pay more attention to is the impact of environmental degradation on supply chains. As a travel industry professional, I've witnessed how natural disasters and ecosystem changes can disrupt business operations. Think beyond insurance premiums and consider how long-term environmental changes could affect sourcing, logistics, and overall sustainability. Preparation in this area safeguards your operations and enhances your responsibility toward global ecological stewardship.
In the world of business, the only thing that is constant is change. We are always on the lookout for potential threats that could impact our company's success. While traditional risks like financial instability and market competition are well-known, there is one non-traditional risk that I believe companies should pay more attention to - the risk of not keeping up with changing consumer trends in the digital age. In today's fast-paced world, where technology is constantly evolving, companies need to adapt quickly to meet the ever-changing needs and preferences of their customers. For our children's clothing and accessories brand, this means staying ahead of the curve when it comes to online shopping trends, social media marketing, and sustainability practices. By embracing these non-traditional risks and incorporating them into our risk management strategy, we have been able to not only mitigate potential threats but also seize new opportunities for growth. Our commitment to staying agile and innovative has allowed us to connect with our customers on a deeper level and build a loyal following in the competitive retail industry. As risk professionals, it is our duty to think outside the box and anticipate future challenges before they arise. By recognizing the importance of non-traditional risks, we can ensure the long-term success and sustainability of our company in an ever-changing business landscape.
The mental health of their workers is a non-traditional risk that businesses should pay more attention to. At Templer & Hirsch, where I work, we've seen directly how mental health problems can affect both individual performance and the overall output of the workplace. An essential part of the personal injury cases we handle includes both physical and mental trauma, which shows how important mental health is. Ignoring mental health can cause more people to miss work, be less productive, and leave their jobs more often. A study by the World Health Organization says that missed work time due to depression and anxiety costs the world economy $1 trillion every year. This shows how big the problem is and how it might affect businesses' finances. From a risk management point of view, addressing mental health issues before they occur can lower the chance of accidents at work and legal claims about employees' health. By making the workplace more supportive, businesses can lower their risk of expensive lawsuits and improve their image as loving employers. Including mental health in risk management keeps workers safe, strengthens the company, and improves its overall performance. This method fits my desire for our client's and team's overall health and happiness at Templer & Hirsch.