Proptech in Real Estate: Opportunity or Threat?
The adoption of Property Technology (Proptech) solutions has accelerated this year as companies and consumers continue their activities under restricted travel and physical interactions.
This has been, and will continue to be, a great enabler across the globe, but Real Estate owners must consider the risks, and therefore strengthen their resilience against increasing cyber-risk.
A Powerful Tool for Malls
Technology has long been in use across the retail sector, for example, particularly in catchment area analysis and the use of footfall metrics. Big Data and the Internet of Things (IoT) are also used to provide deeper insights into consumer behavior within malls, and even beyond to track where people go after leaving the mall, and when. As physical retail becomes more experience-based, with many product purchases shifting online, these insights are critical.
However, this also presents numerous opportunities for cyber criminals to exploit. Cyber risks are inevitable and it is the responsibility of technology adopters to identify these risks, mitigate them, and/or transfer them where appropriate. Should this not be addressed adequately, data loss, data theft and eventual business interruption may ensue.
Defining the Future of Offices
Technology also underpins greater efficiency and sustainability in modern office buildings, which can deliver both operational savings for owners and an improved user experience for office tenants. This is a key element in a building’s “value proposition” in a competitive marketplace, and is one that has become even more relevant given the current economic challenges.
Technology is now an important consideration for a building’s resilience; price and location have long ceased to be the only competitive features. It is important to realize how reliant we have become on technology and to take steps to ensure that it is safe and secure. Moreover, we need to ensure that if something does go wrong, a full recovery can be made as quickly as possible.
Managing the Risks of Using Technology
Cyber security breaches have costly consequences for Real Estate owners and users. Rather than being viewed as an IT problem, this should be treated as a notable business risk. The proliferation of IoT devices offers numerous entry points for a cyber attack to gain access to a buildings ecosystem and infrastructure, potentially leading to business interruption, a ransomware demand, or significant health and safety concerns.
In a complex industry such as Real Estate, implementing effective data protection controls into daily operating procedures is a major challenge. Close alignment is required across people, processes, and technology to enable controls across all the three pillars and to mitigate new emerging risks. It is worth noting that breaches resulting from general human errors or social engineering account for more than 90% of cyber-attacks.
Marsh provides cyber advisory and risk transfer solutions, including the identification of cyber threats, developing likely loss scenarios, quantification of the loss exposure, and evaluation of appropriate insurance limits. We help clients better understand the financial impacts of cyber-attacks and reduce the likelihood of a serious loss.
Download a copy of the risk advisory, and contact the authors to find out more about managing cyber risks for your Real Estate assets.