Data as strategic liability: Quantifying and mitigating portfolio risk in the era of exponential accumulation

Today’s businesses face a paradoxical crisis: the growth in data volumes is accompanied by the destruction of value, with 58% of firms reporting significant losses due to data breaches. This phenomenon is a natural consequence of a systemic misapprehension: the static nature of the data asset has led to the failure to consider the data liability’s dynamic nature. The resultant construct, termed “Data Debt,” is a strategic liability amounting to more than $2.1 trillion globally. The introduction of the Risk-Based View (RBV) model has reconceptualized the big data portfolios using the prisms of integrated risk management, resource management, and regulation. From the analysis, it is evident that 72% of firms incurred costs exceeding 5% of revenue due to data risks that were not managed during 2020–2023. The study has developed a prescriptive model, the Data Debt Index (DDI), that quantifies risks across five areas: obsolescence, compliance, security, integrity, and ethics. The case study has shown that firms that used the DDI model avoided fines exceeding €40 million and recorded an 82% reduction in bias-related breaches. Keywords: Data Liability, Risk-Based View, Big Data Risks, Data Portfolio Management, Cybersecurity, GDPR/CCPA Compliance.