Love and other catastrophes

Following a recent ANZ telco and technology event on connectivity, the internet of things and cybercrime I attended, I had to pause and think about what it all meant. I thought about it for a couple of days and in the end I came away with three key learnings.

We live in a world that is moving much faster and the move to greater connectivity appears to be an irreversible trend. As one of the speakers at the event mentioned, this issimilar to when the first global trade routes were established. Or when a road is first built to a remote village.

"Many of us have experienced a human condition that has left us just as vulnerable in our lives (as cyber connectivity) – love."
Tareq Muhmood, Managing Director, Global Diversified Industries, Global Banking, ANZ

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The risks of today are clearly not the risks of tomorrow. Traditional risk management (from a bank's perspective) was credit risk – the risk associated with a customer not paying back the funds owed or, in the corporate world, the risk of a distributor or buyer not paying on the date due.

This largely involved reviewing historical financial statements and some cash flow projections, assesing management quality and integrity, and broader industry and macroeconomic trends.

But in this area, a key factor many neglect to consider is the cyber risks of customers – and how this could impact their business performance and therefore ability to pay. What are their vulnerabilities, threats and consequences?

We have seen many business disruption of countries, banks and companies caused by cyber attacks but this is unlikely to go away. In fact, it is bound to increase.

Effectively, the cost of this wonderful new world of digital and connectivity is an increased threat of cyber attacks. The good news is the consequences of such disruption can be understood and managed with the right risk approach.

Over the coming years a cyber risk assessment will become part of the overall risk assessment of a buyer or borrower in some industries. So, this brings me to my last take away.

What do you do? How would you react? Should you hide in a cave? Do you try and 'get off the network'? Do we try and reverse the trend of connectivity?

These thoughts took me a few days to process and, finally, I arrived at a conclusion. Many of us have experienced a human condition that has left us just as vulnerable in our lives – love. Love can make us vulnerable by exposing us to hurt.

But do we close our heart to love? Or does each moment of hurt reinvigorate the spirit and prop up the self to learn, love again and experience the wonderful world we live in? Some may think such an ineffable experience as human love is an odd analogy but for many of the great individuals, companies and nations in history the ability to bounce back from hurt or failure is what makes them great. Love may be personal and individual but resilience and learning from experience is universal.

So connectivity is a wonderful thing – we just need to recognise that being open to such connections can result in pain. Fortunately there are plenty of ways to ensure the risk is minimised or even avoided.

Even if cyber heartbreak is unavoidable – and the view from the conference was that it is – being able to weather the consequences of this pain doesn't have be too disruptive. As long as we accept it is inevitable.

I would be delighted to hear your views on connectivity, cybercrime and love in the below comments section.

Andrew Cornell has provided some excellent insights into the event in his recent BlueNotes article.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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