KEEP UP TO DATE WITH ALL THE IMPORTANT COVID-19 INFORMATIONCOVID-19 RESOURCE PORTAL

FANews
FANews
RELATED CATEGORIES

A risky business – global trends point towards future cyber compliance

08 April 2019 Richard Rattue, Managing Director at Compli-Serve SA
Richard Rattue, Managing Director at Compli-Serve SA

Richard Rattue, Managing Director at Compli-Serve SA

Technology continues to grow globally, extending ever deeper into financial services. Of course, along with increased technology, comes increased cyber risk. Businesses, however, may not realise the complexity of the IT risks they face, while furiously fast-tracking new business processes without fully understanding the risks that new technology itself can accelerate.

CNA Hardy’s most recent Future Trends Risk Insight Report states that businesses are investing in technology, without being fully aware of the associated risks. It reports 59% of respondents invested in technology improvements, while only 37% are concerned that cyber risk could become the biggest threat they’ll face in 2019. As the digital age further shapes financial services – globally and locally - the need for better cyber awareness coupled with sustainable compliance is evident and goes hand in hand with the evolution of the industry as a whole. Machine Learning and Artificial Intelligence (AI) are becoming increasingly prevalent, Big Data is bigger than ever, and RegTech could revolutionise how we analyse trader behaviour and manage verifying identity. These all point towards the need for heightened cyber security.

Dealing with your electronic DNA
It is essential to assess your organisation’s electronic DNA and do thorough due diligence on third-party providers. It’s through third-party providers that almost all fraud creeps in, with Marriot Hotel’s latest data breach as a prime example. The estimated cost of managing the breach of some 500 million Marriot guests’ details, could cost $1billion all in for litigation, settling of fines and replacing passports. This is a steep sum but won’t go towards rebuilding any damages to the hotel group’s reputation.

A cost of this magnitude is inconceivable for many businesses to contemplate, but while a similar incident of this size may not be a realistic threat for most, it’s always better to be safe than sorry when it comes to setting up procedures for systems and other risk mitigation measures.
For smaller businesses, keeping up with technology can be tough from an affordability perspective to implement, yet many businesses will have to introduce technology or outsource partners to simply survive in the future.

Size isn’t the biggest issue
Whatever the size of your business, bringing in new technology comes with potential risk if you do not understand how to use it properly, or fail to guard against intruders making off with your client data. By putting in the correct safeguards, one can avoid unintended consequences, which could end up being a priceless exercise.

Corporate risk management must change as well, and subsequent policies set in place in response to the evolving technology-led world we live in. Client needs are shifting too, with some requiring more tech-savvy capabilities than others, so the way we manage this will also have an influence on risks that may arise. If other parts of the world are anything to go by, technology is changing the game and empowering consumers. We need to embrace this, while also putting in effective protective measures.

Accept and protect
Cyberisk is real and won’t go away, particularly as technology continues to tick upwards and hackers amend their approaches, making smarter moves each day. Safeguarding client data and other sensitive information is always best, and smart regulations to come will pioneer a way forward in delivering financial services.

 

Quick Polls

QUESTION

The Budget Speech 2021...

ANSWER

Certainly taxpayer-friendly, with tax increases being kept to a minimum
Realistic and in accordance with my expectation
Is welcomed news and will go a long way to bolster the economy and South Africa
I have mixed feelings… cutbacks and reprioritisations in government spending pose a significant risk and will come at a cost
Oh no! What about our booze and tobacco! Higher sin taxes
fanews magazine
FAnews February 2021 Get the latest issue of FAnews

This month's headlines

FNA VS Compliance: Advisers still tripping up on section 8(1) of the Code!
Taking the lessons of 2020, into 2021
Motor insurers take note: Replacement parts cannot compromise an insured’s safety!
The broker’s dilemma: Courts lambaste non-life insures for business interruption shortcomings
Leading experts warn the world about the dangers ahead
The world of work 2021… smarter, faster, simpler
Trends that will shape the life insurance industry going forward
Subscribe now