Global law firm Hogan Lovells has released a report revealing that 91 percent of businesses face moderate to high levels of technology-related risk.
The firm’s latest report, "The New Riskonomy," investigates the significant risks and challenges in today’s technology landscape, including cybersecurity, data management, and generative AI. The report reveals that most companies are urgently investing in improving their technology risk management practices, with 91 percent of businesses exposed to moderate or high levels of technology-related risk. Despite this, two-thirds of business leaders believe their organizations could take more proactive approaches to mitigate these risks.
Compiled from a survey of 1,500 C-suite executives, general counsel, and compliance leaders across key sectors such as financial services, technology, energy, automotive, and life sciences, the report provides a comprehensive overview of current technology risks. Participants included leaders from the UK, United States, China, Germany, and Brazil.
Des Hogan, global head of litigation, arbitration and employment at Hogan Lovells, commented on the findings, stating, “Companies across industries are racing to gain a competitive edge through the use of emerging technologies such as blockchain, IoT, and AI. At the same time, every transformative technology also presents risk—and these risks can be business critical.”
Hogan added, “Our report found that many business leaders struggle to navigate the complex nature of changing technology legislation and new compliance obligations. This report highlights some of the areas that merit particular focus.”
The report emphasized the importance of embedding proper guidance for generative AI. It noted that its growing popularity could lead to factual inaccuracies, intellectual property rights violations, data protection issues, and ethical misconduct without the right strategies and policies. Currently, 43 percent of leaders from organizations that have banned generative AI believe no additional policies are required. In comparison, 38 percent of organizations using it have created bespoke systems to balance caution with innovation.
Cybersecurity remains a significant concern, with the report highlighting it as the second-highest issue related to potential litigation disputes and investigations. Despite this, over a third of C-suite and compliance leaders admit their organizations’ cybersecurity strategies are still in their infancy, with tech and telecoms sectors showing the highest exposure to threats.
The report includes Hogan Lovells’ Riskonomy Radar, which maps organizations' exposure to technology risk across three ranges: low, moderate, and high. The analysis found that high-growth organizations investing significantly in technology plans—on average 13 percent more of their IT budget—are more likely to fall within the low-risk category. In contrast, 38 percent of no-growth organizations are in the high-risk range.
The report underscored the need for businesses to revisit their technology risk strategies and invest in proactive measures to manage emerging risks effectively. Hogan Lovells aims to provide C-suite and compliance leaders with insights and tools to navigate these challenges and minimize exposure to technology-related risks.