Is cybersecurity enough of a priority in emerging markets?
Organizations in emerging markets are often able to move fast in the digital space. But are they treating cybersecurity as a risk management issue and taking a strategic approach to prioritizing assets for protection?
Digital technologies are enabling smart companies to overcome growth obstacles in emerging markets and harvest rich rewards. Every day, digital start-ups show their capacity to disrupt traditional business models and fulfil consumer demand in fresh ways. Long-established companies are either being displaced by nimble new champions or racing to adapt the way they do business.
As Sunny Chu, EY’s Singapore-based Asia-Pacific Advisory Partner and Analytics Leader, sums up: “In order to succeed, organizations must make bold technology investment decisions that are driven by corporate strategy while managing a range of severe risks, such as cybersecurity and data privacy concerns.” Today, he says, the convergence of technology, investment strategy and risk is “mission critical.”
Cybersecurity must be a digital priority
Cybersecurity heads four digital innovation priorities Almost two-thirds of emerging market CFOs in a recent survey now regard managing cybersecurity as a high or very high priority. They realize that their ability to protect proprietary technology, service clients, secure customer data and develop the value of their brand relies upon repelling or containing cyber attacks. Many have already been victims of hacking or other online malice.
Alec Joannou, CIO of South African chemicals company Sasol, reflected on how, as companies increasingly integrate IT in all they do, technological mastery and a culture of information security must extend from the boardroom throughout an organization.
Joannou believes companies must ensure they can:
Too many companies focus on protection and underinvest in detecting and responding.
Another emerging market CFO, Rajesh Gopinathan of Tata Consultancy Services (TCS), stressed the importance of respecting privacy and protecting personal data across multiple legal jurisdictions. And the risks extend beyond in-house operations. Great care is also needed to ensure personal and corporate data remains secure when shared with supply chain partners.
Agility is an advantage
Developed economies have large, well-established, traditional enterprises filling business and consumer needs in markets with sound infrastructure where the rule of law is strong. In emerging markets, by contrast, growth is often fast, but needs may be unmet, infrastructure poor and compliance patchy. Innovation, enabled by digital technologies, can therefore happen far more quickly. The same is true of the ability of organizations in emerging markets to embed security in their digital innovations.
For example, Alibaba’s business-to-consumer (B2C) marketplace Taobao gave small businesses a means to meet consumers nationwide and bargain by chat to vaunt their goods or negotiate over prices. Consequently, social and retail functions combined online.
This enabled parties to build trust where there was a shortfall left by weak governance in this area. And because banks were scarce and card payments uncommon, the group set up Alipay, an online escrow payment system that only releases money to the vendor once the buyer is satisfied with the goods. Now Alipay is evolving into a standalone savings and transaction bank.
This is the kind of digitally enabled innovation we will potentially see much more of in emerging markets. And as long as cybersecurity is recognized as a priority, truly entrepreneurial businesses will be able to achieve extraordinary things.