WEDO TECHNOLOGIES WORLDWIDE USER GROUP & SUMMIT 2016: The internet of things and big data presents “the most monumental of all risks” for businesses, futurist Patrick Dixon warned.
With the amount of personal data held by companies growing, and encompassing among other things financial, location, and health data, he said that “you have the biggest target for criminal activity that the world has ever seen”.
Dixon, who is founder and chairman of strategy consultants Global Change, said that while there is a clear potential for financial damage through cyber security and fraud, perhaps the bigger issue is the damage that can be done to the brand.
“Reputational risk is the number one thing that companies will be thinking about at board level for the next decade. Why? Because it is lost so quickly, so hard to win back. If you think about cyber security as a way to prevent fraud, I’ll tell you the cyber security risk is a reputational risk as well, it’s not just the direct bottom line impact of money stolen”.
He continued: “It’s the fact that account details have been broadcast on the internet, it’s the fact that people don’t feel safe to put money into banks, it’s the fact that the telco is embarrassed to find all the calls people have made to other people published on the internet – it’s reputation that really matters”.
Dixon, author of The Future of Almost Everything, also warned that “institutional blindness” is a particular risk factor, with benchmarking against others in the same industry “being highly toxic to management – one of the fastest ways to magnify risk”.
“70 per cent of all the manufacturers of memory chips in the entire world decide to put their manufacturing in the same flood plain, in the same country, where they were hit by the same disaster. Why was that? Because they decided to benchmark their risk against the industry average,” he said.
Another example cited was the automotive emissions scandal, which has hit car maker VW particularly hard.
“Everybody else is doing it, so it’s probably OK. We benchmark ourselves against the industry average, the industry average is flawed, and we all go over the same cliff together.”
But while risk management could come across as a way to protect against things going wrong, Dixon also argued that there was also an upside.
“We can see risk as a downside, but if we manage risk better than a competitor, we grow through the events and the competitor goes down,” he said.