Amazon Web Services, which went down at the beginning of this month, is “incredibly reliable,” Dave Bartoletti, an analyst with research firm Forrester Research Inc., told the
Wall Street Journal in a recent report.
But, “these types of things really demonstrate how dependent we all are on each other,” Judy Selby, BDO Consulting managing director said in a phone interview with
Insurance Business.
“No matter how strong you are internally, you’re still dependent on this whole ecosystem of technology in order to do business,” she added.
Selby noted that consumer expectations are changing as they interact more with technology and technology enabled services become an increasing part of their lives.
“It creates a lot of challenges for companies,” she observed. “It’s challenging because threats are always evolving.”
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While these companies and their insurers are getting a grip on risk, she noted that it’s still hard to build capacity to cover risk for large companies, which could run into the range of hundreds of millions of dollars.
“It’s not crystal clear, but (we) know, what it usually takes to respond to a breach of this size or that size and how much litigation costs, what’s the average fine from a regulator, those types of things. We’re starting to get a lot more information out there,” she said.
Further, “But for some of these types of issues it is evolving, that is for sure. So it’s kind of a wait and see.”
To deal with these evolving risks, she said, it is always important to maintain transparency, as best as a business can, to manage customer expectations.
“The more transparency you have the more protection that gives you, ultimately,” Selby emphasized.
“I don’t think people have a reasonable expectation of 100% security any more. I think people know that things will go wrong. But I think that there is an expectation that you are trying and that you had adequate safeguards in place and that you are being flexible and you’re being adaptive - you’re aware of current threats, and you’re monitoring the landscape and you modify accordingly.”
Selby added that customers expect to know what companies are doing with the data that they share with their service providers.
“They’re expecting to hear the truth from you - if somebody agrees to give you their information they expect you’re going to tell them the truth,” she concluded.
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