7682_RiskWatch_Winter2015_The Future of Cyber Risk
1. Risk Watch Winter 2016 The Conference Board of Canada 11
A CONVERSATION ON
THE FUTURE
This is the third (and final) article in
our series on cyber risk. Our first article
discussed how organizations could start
conversations on cyber risk and explore
scenario analysis. The second was on
the current state of cyber risk from the
perspectives of those working in this
field. For this article, we will bring some
insight into what the future of cyber risk
might hold, and whether it may appear
far-reaching for some, or quite plaus-
ible for others. The article is meant to
help leaders and boards become more
forward-thinking and predictive in their
risk assessment of technology, and
its growth, capabilities, and potential
impact on their business.
PROGRESSION AND
PREDICTION
Technology and cyber risk are continu-
ously evolving at a rapid speed. We may
have wild ideas about their future, or
maybe we simply cannot wrap our heads
around the two.
If we look at the science fiction most
of us grew up with, you can see
glimpses of past imagination in our
present time. Remember the two-way
video communication from Star Trek?
Who can forget the recorded image of
Princess Leia in 3D video stored within
R2-D2 and used to summon help in the
1977 hit, Star Wars? That same imagina-
tive technology brought Tupac back to
life to reunite with Dr. Dre and Snoop
Dogg for the 2012 Coachella Valley
Music and Arts Festival.1
However, we have not quite made it to
outer space like the Jetsons. If we try to
think of how humans may coexist with
technology by 2030 or 2050, we can
easily imagine how driverless or com-
puter-aided transportation can improve
traffic flow and reduce collisions. We
can see how global warming could
drive advancements to how we produce
and transmit electricity via smart grid.
With the connected home becoming
more common, it is not too implausible
to envision how computers will learn
our behaviours to favour our hectic
lives by ordering our groceries based on
what we have in the fridge and what we
like to eat.
1 Ngak, Tupa Coachella Hologram.
TECHNOLOGICAL GROWTH AND
HUMAN EVOLUTION
Predicting the future is possible by
understanding the exponential growth
curve of technology and human evolu-
tion. Taking from Moore’s Law that
says, “ … the number of transistors
in a dense integrated circuit doubles
approximately every two years.2” Ray
Kurzweil expands this theory with his
hypothesis in the 2001 essay, The Law
of Accelerating Returns. The basis of
this theory is that all evolutionary sys-
tems tend to evolve exponentially—not
just technology.3 This includes human
systems interacting with technology
systems.
Kurzweil—Google’s director of engin-
eering, scientist, inventor, and futurist—
believes (at present) that our brains and
artificial intelligence will come together
with use of tiny nanobots— networks
of computers and software to create a
“hybrid artificial intelligence.4” He may
not be too far off.
2 Wikipedia, Moore’s Law.
3 Kurzweil, The Law of Accelerating Returns.
4 Israel, Artificial Intelligence.
By Christine Maligec
The Future of Cyber Risk
Expectations, Benefits, and Consequences
2. Risk Watch Winter 2016 The Conference Board of Canada12
Kurzweil’s 2010 essay, which reviewed
previous predictions from The Age of
Intelligent Machines and The Age of the
Spiritual Machines (from the 1980s and
1990s,5 respectively) forecast that:
• “individuals (would) primarily use
portable computers”6;
• computers would “become dramatic-
ally lighter and thinner”7;
• computers would be “commonly
embedded in clothing and jewelry—
such as wristwatches, rings, earrings,
and other body ornaments.”8
Humans will certainly want technology
to add value to their everyday lives.
Organizations are currently experi-
menting with drone-based product
delivery service. Google, Amazon, and
DHL are some of the major players
investing in the experiential unmanned
aerial vehicle (UAV).9 Shopify has also
recently collaborated with Uber to test
same-day local delivery in three major
U.S. cities (New York, Chicago, and
San Francisco).10
Today, robotics are used more frequently
in high-hazard environments, such as
land bots and UAV’s within the military,
and to drive unmanned heavy equipment
in Canada’s oil sands. These bots are
being repurposed to have a beneficial
and commercial application with the
marketing of vacuums, mops, and other
mundane household chore products. As
well, more companies are experimenting
5 Kurzweil, How My Predictions Are Faring, 3.
6 Ibid., 11.
7 Ibid., 12.
8 Ibid.
9 Weinberger, Google’s “Wing” Drone Delivery
Service.
10 CBC News, Shopify to Partner With Uber.
with driverless cars for the everyday
commute. It would not be too farfetched
to see robots used more frequently in
industry areas where labour costs are
difficult to control or consistency in
quality is important. All of which could
be controlled from a portable device or
by algorithm.
INTERCONNECTIVITY DEMANDS
AND DRIVES CHANGE
With the expectation of 80 per cent
of the world’s population to have a
Smartphone by 2020,11 human-to-human
connectivity is anticipated to increase
global trade, communication, and know-
ledge sharing. This newfound techno-
logically induced freedom will bring a
steep learning curve for individuals and
organizations alike. There are issues and
risks on the appropriateness of sharing
information, developing the skills to use
technology as intended and, as well,
designing systems and software that are
less vulnerable.
With the Millennials demanding and
driving product and innovation design,
organizations had better get it right the
first time! This generation will have
grown up with technology and will have
an expectation for it to work or they will
move on to the next new thing.12 The
Smartphone and its connectivity to the
Internet is their linchpin. It is not only
a means of communication with friends
and a companion in times of loneliness,
but also a concierge for questioning and
11 The Economist, Planet of the Phones.
12 Solomon, This Is the Year of the Millennial
Customer.
challenging an organization’s values,
decisions, and actions.13
In the early ages, communities were
historically built to reflect the “contem-
poraneous norms or philosophical and
religious beliefs”14 of the time. Today,
communities are designed by urban
sprawl, making the current generation
less attached to politics and religion as a
means of social interaction. The present
generation uses technology to connect
with its vast network of friends.
This generation also sees access to the
Internet less as a commodity and more
of a basic human right. A number of
movements toward net neutrality and
Internet freedom are being more widely
accepted by groups and individuals,
including the United Nations Office
of the High Commissioner for Human
Rights (OHCHR). The overarching
concerns are the protection of privacy
rights in the context of digital communi-
cation; preventing digital surveillance
of communication and collection of
personal data without warrant; oversight;
transparency; and accountability for
state-sponsored surveillance programs
in contravention of international human
rights law.15
This progression is also putting some
of the onus on major private sectors in
the U.S. and the rest of the world to
provide transparency reports on request,
as well as disclosure of information.
This is being done in an effort to prevent
the practice of bulk data collection.16
13 Ibid.
14 Wikipedia, Urban Design.
15 United Nations General Assembly, Resolution
Adopted by the General Assembly.
16 Office of the High Commission for Human
Rights, Global Network Initiative.
3. Risk Watch Winter 2016 The Conference Board of Canada 13
The European Union’s Data Protection
Directive has begun to create structure
and universal standards around the use
of the Internet—including the imple-
mentation of its deliciously sounding
“cookie law” to inform and empower
the end user about the use of cookies on
European web pages.17
The corporate world sees the oppor-
tunity in engaging skilled “white hat”
hackers to find vulnerabilities in their
systems. One such break came to two
successful individuals who were able to
cash in on a “bug bounty” of one mil-
lion frequent-flier miles from United
Airlines.18 Commonly used in the tech
sector, bug bounties have started to
become an innovative, external perspec-
tive to find security vulnerabilities for
other major firms.
Millennials are independent thinkers
who are values-driven and use tech-
nology to induce change. They will
slowly change the face of politics and
activism because of economic hard-
ships perceived to be forced upon them
by macroeconomic trends.19 We saw
the beginning of this trend during the
“Arab Spring” pro-democracy uprising
in 2011, which was dubbed the Twitter
Revolution or Facebook Revolution for
its ability to organize masses in spite of
governments controlling the medium and
the message.
17 European Commission, Information Providers
Guide.
18 Graham, Two Hackers Earned a Million Miles.
19 Pew Research Centre, Millennials in Adulthood.
ARTIFICIAL INTELLIGENCE:
THE GOOD AND BAD
The vigilante militia movement has
evolved from boots on the ground to fin-
gers on the keyboard. The decade-long
progression of Anonymous has seen the
group transform from an online forum
for sharing ideology to a decentralized,
well-organized group who convey seek-
ing to do right by society. Anonymous
had also declared war on al-Qaeda, the
Islamic State, and other terrorists after
the Charlie Hebdo shootings20 and,
most recently, the Paris massacre of
November 13, 2015.21
This adaptability of an adversary has
created an almost franchise-like splin-
tering of extremist group and militia.
Individuals who spread extremist propa-
ganda via social media and the Internet
are met with “cyber warriors” who use
their “digital weapons” to disrupt or take
down messaging, and silence Twitter
feeds and other online communication.22
Western military experts have taken note
and are looking to take advantage of
these dynamic trends. So much so, that
the Canadian military posted a tender
looking for white hat hackers to help
look for exploits in vehicles.23
Combat technology has also come a
long way from the bayonet. The Cold
War’s Strategic Defense Initiative (com-
monly referred to by mainstream media
as “Star Wars”) of the early 80s began a
space-based, technology-driven warfare
movement as well as an increased use of
20 Wikipedia, Anonymous (Group).
21 Reuters, Anonymous Hackers Declare War.
22 Cottee, The Cyber Hackers.
23 CBC News, Car Hacker Sought by Canadian
Military.
robotics. Artificial intelligence (AI) in a
military application is driving this next
generation of battlefield dynamics. AI
not only has the ability to operate driver-
less vehicles, but it can also make deci-
sions on adapting strategy and resources
(similar to military brass)—transitioning
us from Star Wars to Skynet.24
However, tech leaders like Bill Gates,
Elon Musk, and Stephen Hawking are
heeding caution on using artificial intel-
ligence in war. They created an open
letter warning of the possibility of short-
and long-term adverse outcomes: for
example, the autonomy of artificial intel-
ligence that goes feral, and this technol-
ogy getting into the hands of dictators or
terrorists.25 Hawking warned, “Humans,
who are limited by slow biological evo-
lution, couldn’t compete, and would be
superseded (by artificial intelligence).”26
All of which are travelling on the back-
bone of the systems we design to com-
municate with each other—the Internet.
HUMANITY AND TECHNOLOGY:
NEED FOR CO-EXISTENCE
Jack Ma, Alibaba Group’s Executive
Chairman, said it best:
“We all pretend we know a lot
about the Internet, but compared
to the future, we know so little
about our future. We know so lit-
tle about the Internet. So, I think
governing the Internet is import-
ant. We have to take good care of
(it). About the security, privacy,
24 RT News, Russian ‘Skynet’ to Lead Military
Robots.
25 Feeney, Elan Musk and Stephen Hawking.
26 Cellan-Jones, Stephen Hawking Warns.
4. Risk Watch Winter 2016 The Conference Board of Canada14
intellectual properties, but we
should govern it in a new way.
Not in the traditional way.27”
Ma went further to say, “we should gov-
ern the Internet like a zoo. That means
all kinds of animals. We should not
govern the Internet like a farm—same
kind of animal. Chicken and ducks all
the same.”28 There is profound wisdom
of setting up universally defined and
accepted rules that will help to drive
innovation for the future that is in the
best interest of humanity while respect-
ing technology; enhancing the evolution
of our coexistence.
Confucius said, “The cautious seldom
err.” We should be mindful of not only
the known or perceived benefits of
technology, but also the unintended
consequences, the unexpected benefits,
unexpected drawback, and perverse
results.29 We have plenty of contexts to
drive discussions on this co-existence
and uncertainty.
As risk professionals, we must seek
out the various experts, visionaries, and
technological innovations to enhance
the discussions that will lead to further
insight into the threats and opportunities
to our businesses and communities.
Our goal should be to ensure that the
environment, people, and technology
are aligned to meet our objectives and
do not outpace or destroy one another in
their evolution.
27 Jack Ma (Executive Chairman, Alibaba Group),
in-person interview by World Economic Forum,
Sept 9, 2015.
28 Jack Ma (Executive Chairman, Alibaba Group),
in-person interview by World Economic Forum,
Sept 9, 2015.
29 Wikipedia, Unintended Consequences.
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Christine Maligec is currently the Risk
Officer at Alberta Blue Cross. With over
12 years of risk management experience,
Christine is able to bridge her experi-
ence across multiple industries and
disciplines to look at risk from a holistic
perspective. In 2014, Christine started
an informal, grassroots ERM network-
ing group in Edmonton. In addition, she
supports the Strategic Risk Council by
co-chairing its mentoring and coach-
ing initiative as well as sitting on an
advisory and executive committee. As an
active Risk & Insurance Management
Society (RIMS) member, Christine has
been involved with her local RIMS chap-
ter for almost a decade and is presently
the social and events chair.
Christine Maligec,
CRM-E, CRIS
Risk Officer,
Alberta Blue Cross
5. Risk Watch Winter 2016 The Conference Board of Canada 15
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