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Social media now seen as high risk

High risk: Social media is now viewed as one of the top five risks for companies

Social media has now made it onto the list of top five risks — right up there with financial risk.A new Deloitte and Forbes Insights report finds that while the majority of executives surveyed anticipate that the global economic climate will be the greatest source of risk through 2015, more than one in four believe social media will play an increasingly important role.The survey, which interviewed 192 US CEOs, senior vice presidents and vice presidents from top companies of all kinds, found that 41 percent of them see the global economy as the most important source of risk while nearly a third put government spending and budget into that category.Regulatory changes were of concern to 30 percent of respondents and both social media and financial risk were seen as a concern by 27 percent.“Social media wasn’t even on the radar a few years ago, and we’re now seeing it ranked among the top five sources of risk, on the same level as financial risk,” said Henry Ristuccia, partner, Deloitte & Touche LLP and co-leader of Deloitte’s Governance and Risk Management services. “The rise of social media is just another contributor to the volatile risk environment companies are being forced to navigate. The current marketplace seems to require that organisations be nimble in their risk assessment approach, whether it’s dealing with what employees post on social networks, or how they’re coping with regulatory changes or taking advantage of the opportunities rewarded risks can create.”Top areas of concern regarding increased volatility over the next three years included financial risk (66 percent of respondents), followed by strategic risk (63 percent) and operational risk (58 percent).More than half of executives believe that regulatory, technological and geopolitical risk will increase in volatility, and 55 percent reported that their organisations will revamp their risk approach within the next 12 months. Roughly nine in 10 (91 percent) reported that they plan to reorganise their approach to risk management in some form or other over the next three years.Despite advances in risk-related technologies as well as concern about unstable risks, the survey found that automation tools and tools used for continuously monitoring risk are underutilised. Most monitoring is done periodically, on a monthly, quarterly, biannual or annual basis.“Based on the findings of this survey, and our interactions with clients, we believe technology has the potential to play a breakout role in the management of risk, but many companies are still behind the curve in this area,” said Mark Carey, partner, Deloitte & Touche LLP and leader of the US Governance and Risk Strategies services for commercial and public sector industries. “It is encouraging, however, that more than half the respondents said their companies were planning to invest in continuous risk monitoring, and the tools that are available should not only help them with risk management overall, but also increase efficiency and decrease costs over time.”