How do financial institutions deal with cyber risk and privacy risk on social media?
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#FinancialSevices #SocialMedia #Money #OutlookMoney #OutlookMagazine #OutlookGroup
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00:00 Where does cyber risk security, forensics and you know the whole gamut of privacy and
00:16 data being balanced, you know, how do organizations deal with it from a security perspective and
00:25 how do customers feel when they are doing transactions or when they are disclosing information
00:31 on social media channels because you know Twitter banking is great as an idea but people
00:40 might not be endorsing that Twitter banking channel as much as they would do traditional
00:44 banking.
00:45 I will start with you sir.
00:46 I think today the reason why companies are willing to go the social media route for acquiring
00:51 customers in personal finance is because there is a very large number who have not yet moved
00:56 into personal finance.
00:57 So for us to say that we will ignore this or we will try and look at this as a cost,
01:03 I think we in our mind while we are saying cost, we are all looking at this as an investment
01:08 and there is going to be a return on investment and you are just trying to expand the market.
01:13 In terms of risk, I think there is if we get down to transacting through social media,
01:19 there is absolutely huge risk.
01:21 I agree that you know we have to use this channel primarily to educate and to sort of
01:28 spread literacy, make them aware and if you can ultimately lead it to an app which is
01:34 again controlled, which allows for certain transactions and that is very tightly sort
01:39 of regulated in a manner, I think that is where you will try and sort of take care of
01:44 some of these risks.
01:46 The fact that you know it can be hacked into somebody else's transacting, I mean whole
01:50 bunch of things need to be thought through before you use social media for actually going
01:55 and doing transactions.
01:56 I think that is a little far distance away.
02:01 One is definitely you know the moment you put transactions on a platform like social
02:04 media, there is risk which goes up.
02:07 But I am sure that you know the way technology is moving, they will find a way to secure
02:11 that as well you know much more.
02:13 So you still have Twitter transactions which are reasonably risk free where you can do
02:17 a mapping and you can get a registration and you know which handle, which phone it is coming
02:20 from, et cetera, so you can do that.
02:22 But very soon I am sure you will get technology where you can secure an entire piece on a
02:26 particular device and then you can enable transactions.
02:28 That will also come in and maybe the tech friends can comment on how that is happening.
02:34 Just a comment on saying that you know whether social media can take over and become large,
02:40 I would say it is not just about social media, let us just look at the entire digital here.
02:44 So there are banks in Europe which are purely digital banks, they do not have a single branch.
02:48 There is robo advisory which is catching on to a large extent where there is very little
02:53 or practically no human interface and there are just tools and you know what we call tools,
02:58 robo advisory.
02:59 So you go and you do your planning, et cetera, and you do an interaction through a tool which
03:04 is there.
03:05 And so all this is catching up.
03:06 So I am not sure whether we can make a blanket statement saying that social media will, you
03:12 always need a person to do planning because the way generations move, the way trends change
03:17 can be dramatic and people can be very comfortable just talking to a computer and getting advice
03:23 from a computer and then maybe taking their decisions.
03:25 That might really come in.
03:27 So just my closing comment, that social media is I think a big, big channel.
03:30 It provides a huge amount of opportunity.
03:34 You cannot ignore it and what it can lead to and evolve further, it's still out in the
03:40 open and in the next few years will tell us how the larger potential.
03:43 I think there are two points I would like to add.
03:46 There's a social media risk of a different kind which is inside out from the organization.
03:52 We have been talking about enabling transactions and customers reaching us and the risk in
03:57 that which is inherent and we all know that.
04:00 There's another risk that social media actually is graying out the different line between
04:04 your professional life and your social life.
04:07 So there's a definitive risk around data management and data leakage within the organization to
04:12 outside using social media.
04:14 We in our moment of pride or in a moment of joy, we can post numbers like I've met my
04:20 sales target of so much, right?
04:23 And I'm happy I got awarded as the best sales guy for the West Zone, for example.
04:29 What you are essentially doing is revealing to your competitor and your friends what you
04:34 have done business for, which is not prudent at that stage.
04:39 So there is a risk which I think organizations have to think through.
04:43 We are all thinking.
04:44 There's too much thought going in.
04:46 I think it has to become a very structured area where, and I like this question that
04:51 he has asked initially, is we need to create social media regulator itself to understand
04:57 what it means for us because a data leakage from inside out is a very big issue for us.
05:02 And no matter how many controls you put, how many technology controls, process controls
05:06 you put, right?
05:07 You can't take away that risk.
05:09 That's one.
05:10 The second thing is all organizations are actually engaging in social media for employee
05:16 engagement programs, right?
05:19 And many employees leave, but they are still part of those groups, right?
05:25 They have friends.
05:27 And I think Govind mentioned a very interesting point is one comment in a social media, if
05:32 it's good, doesn't sort of bring you so much reputational value.
05:35 If it's bad, it brings you 10 times, 100 times more disruptive reputational value, right?
05:40 So social media as a risk entity, I would say, has a pros and cons.
05:45 It's not a very clear thought through area because the speed in which people got latched
05:49 onto social media was far faster than when our regulators or the governing bodies actually
05:54 thought of creating a forum where we can control that.
05:58 And we need to look at it both inside out and outside in because otherwise it's going
06:02 to be a bit of a mess.
06:03 It's difficult, right?
06:04 Right now you have companies who actually engage with a lot of companies, with Reliance
06:11 as well, who actually monitor social media on a day in, day out basis.
06:15 They look at comments from people.
06:17 And you have to reply to them not as a standard answer, "Thank you for your response.
06:20 We appreciate, we understand your inconvenience cause."
06:24 We have to be really subjective and objective to the question that he's asking if it's
06:28 a grievance because it will otherwise go viral.
06:30 So there's a huge, huge manpower requirement that comes in.
06:33 There's a huge response education that comes in, right?
06:37 And it's all risk, brand, reputational, compliance, legal, customer loss.
06:45 So I don't know.
06:46 We'll have to probably work towards making a structured approach to this rather than,
06:49 you know, the knee jerk reaction that all the organizations are doing right now because
06:54 of a lack of a structured model around it as opposed to a legacy risk model that you
06:58 have across every business.
06:59 [Music]