Risks that need bigger thinking
Thanks to technology, business has changed and clients’ pace has changed. But with this comes increased risk and exposure to threats. As a potential high-growth area for many businesses, it is important to explore where technology is going to take us, the risks of cybercrime and the solutions to these threats in the business space.
A deeper understanding
When we think of technology, are we really thinking about how much has changed? How much do we really value the data that we operate with on a daily basis?
These are just some of the questions that were posed during a panel discussion at the 2016 PSG Conference held at Sun City.
Bruce Whitfield, financial journalist and key note speaker, facilitated a discussion with Bertus Visser, Chief Executive of Distribution with PSG Insure, Craig Rosewarne, Managing Director of Wolfpack Information Risk, Emma Sadleir, Social Media Law Expert and Simon Colman, Head of Liability Underwriting at SHA Specialist Underwriters who all shared their thoughts with financial advisers and product providers on the risks that need bigger thinking.
How much has changed
“The way we communicate has changed so significantly and so quickly that it has been quite difficult to keep up. What we need to appreciate is that the internet has given us a force. Every person who has the internet has instant access on a public, permanent platform. This obviously poses a risk for companies or employers because it means every single one of the employees from high management to security has access to this platform and poses a risk to the company,” says Sadleir.
“When we look at social media, for example, there is no choice on what you do on social media but it is a question of how well you do it. Social media comes with disciplinary, legal and reputational consequences,” she continues.
Dangers of digital platforms
Sadleir believes digital content is dangerous content. “Even though there are privacy settings, there is no privacy because this is a public platform.”
Looking at an example, many will recall when Judge Mabel Jansen recently faced controversy about comments she made about rape and racein "black culture" after journalist Gillian Schutte posted written exchanges with the judge. Her remarks were dropped on Facebook when Schutte decided to make personal messages that Jansen sent to her a year ago public. After a writer saw her post and shared it on social media, it became a storm in its own right. Following death threats, the judge deleted her Facebook page to protect her family and friends.
Another example is that of the two Associated Press Twitter accounts that were hacked in 2013, sending out a tweet claiming that President Barack Obama had been injured in explosions at the White House. This sent markets on a round-trip roller coaster ride that took a brief plunge. The Associated Press later reported that hackers compromised the Twitter account.
“This shows the potential harm that can happen to an individual, company or brand. It just takes one small incident. One employee, for example, can cause reputational harm just by one tweet or Facebook message. Once it is out there, it is out there,” continuesSadleir.
In the last two years, Rosewarne says the dangers of cyber risk, for example phishing, have increased. “Phishing is an attempt by fraudsters to gain passwords, credit card details etc. by sending mail messages, creating false websites, and phone calls designed to steal money.”
Questions to ask
Visser says there is a black market for data and people can sell this information, so it is very important to protect your data. “This should be taken very seriously. We, for example, run weekly scanners, have cyber insurance, firewalls internally and externally.”
“Businesses need to have risk management practices in place. Questions that need to be asked include, what is the crisis management plan should something happen? What is the business view when something goes wrong? Is the employer going to sit back, distance him/herself or fire the employee?” says Colman.
“Cybercrime is not rocket science. There are fantastic tools to assist. The responsibility is for the adviser to understand the risk in the business. Ask yourself what will happen to the business if it gets contaminated? The adviser needs to understand the topic and commit the time,” continues Visser.
Effective uses
Colman mentions that it is important to not be so terrified of social media because nowadays social media is often used. It is just a matter of how we use it.“As an underwriter we use social media a lot. We look at clients’ Twitter profiles, which can really be beneficial,” continues Colman.
Sadleir mentions that when it comes to an adviser protecting him or herself, he or she should educate themselves in terms of dos and don’ts on social media. “Don’t wait for POPI, you should start getting compliant and help protect data.”
On the other hand, Visser says when it comes to talking with clients about liability cover, brokers are often hesitant because they feel it is an area that is a bit complex. However, the truth of the matter is that it is fairly simple once you understand it, and the product providers PSG partners with are very willing and able to assist in this process. Most are willing to join advisers in a few client meetings, just to make sure you get the gist of it – use this opportunity. The reality is that you need to talk to your clients and inform them about what can go wrong and why it is critical that any business, no matter how big or small, needs cyber liability cover. Visser also says that people need guidance on what and what not to do when it comes to the use of the internet and social media.
Editor’s Thoughts:
From corresponding with clients in an effective manner, to looking at client profiles, there is no doubt that the internet and technology offer potential for financial planner practices. However, as Sadleir put it, once information is out there, it is out there so we need to tread with caution. Are you making use of the digital platform in your practice? If so, what risk management strategies do you have in place? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].
