Which of the following IT processes is likely to have the GREATEST inherent regulatory risk?
Click on the arrows to vote for the correct answer
A. B. C. D.B.
Regulatory risk refers to the potential for non-compliance with laws, regulations, or industry standards, which can result in legal, financial, and reputational consequences for an organization.
Out of the four IT processes listed, data management is likely to have the greatest inherent regulatory risk.
Data management involves the collection, storage, processing, and use of sensitive data, such as personal information, financial data, and intellectual property. Regulations governing data management include the General Data Protection Regulation (GDPR) in the European Union, the Health Insurance Portability and Accountability Act (HIPAA) in the United States, and the Personal Information Protection and Electronic Documents Act (PIPEDA) in Canada.
Non-compliance with these regulations can result in significant penalties and fines, legal action, and reputational damage. For example, GDPR violations can result in fines up to 20 million or 4% of global annual revenue, whichever is greater.
In addition to external regulations, organizations must also comply with internal policies and procedures regarding data management, such as data retention and disposal policies. Failure to comply with these policies can also result in regulatory risk.
While the other IT processes listed may also be subject to regulations and standards, such as project management frameworks and ITIL for IT resource management, the potential consequences of non-compliance are generally not as severe as those associated with data management.