Data: Friend or foe?
Is the new prolific currency of data a resource of abundance or a ticking bomb? Maddy Christopher looks at the significance of data as a dominant medium of exchange in 2020.
“Ever since man first appeared on earth, his existence has been defined by a perpetual and brutal quest for control over the world’s natural resources.”
Cynicism aside, author Amine Bouchentouf highlights how nation-states have used the most valued commodities to expand their power from the era of bronze and iron to gold and latterly, oil.
As we enter 2020, our most coveted resource is not a physical compound, but a virtual asset: data.
Today, the five technological giants – Apple, Amazon, Google, Microsoft and Facebook – harness data to drive their businesses. Their combined yearly revenue is nearly £700bn, surpassing Saudi Arabia’s entire economy and all of its oily riches.
Data is a vital asset to more than just tech companies. Exponential growth in computer development over the last decade “is making possible the capture and processing of entire data sets, regardless of their size and complexity”, according to the ICAEW’s 2019 report, Big data and analytics: the impact on the accountancy profession.
Accountants record, validate, process and use data to communicate business activity for a wide array of purposes. As custodians of financial data, their role is central to the new information economy.
On the plus side, the ICAEW report highlights how big data can improve business decisions through more timely, market-sensitive insights and forward-looking predictions. Automating decision-making with bigger data sets and AI-powered tools holds the promise of creating even more value for businesses.
The “the ability to analyse entire data sets – in some cases billions of transactions in a ledger – is changing traditional approaches to audit”, the report adds. The ability to process big data, and access to data analytics enables accountants and auditors alike to visualise and process extensive data, identify outliers, and draw conclusions and predictions.
Cloud computing has accelerated this data exploitation, paving the way for the likes of Google and Facebook, to Xero and QuickBooks. Cloud computing allows masses of data to be shared across a business or among various, creating new business models where the value exchange is virtual – and often based on the underlying data.
But for all these opportunities, the report warns of the “risks in using data in these ways”. Care needs to be taken to avoid unjustified conclusions, ensure appropriate reliance on predictive models and manage the impact of growing automation.
“How do you know something has gone wrong? Who is responsible? How do you correct errors?” the ICAEW report asks. Automating more decisions and actions and reducing the role of human intervention increases the potential impact of hacking and rogue machines.
Managing these new data risks will force the profession to put much greater emphasis on cyber security.
Data: driving value or threats
Crisis Team CEO Bill Mew describes data as “the new uranium rather than the new oil”, pointing out that data becomes more dangerous as its value increases. As humans entrust more information to the hand of technology, we put our data at greater risk of cybercrime and malfeasance, even from the big brands we may trust.
Perhaps you’re one of those people who have an uneasy sense that your search engine is listening to you?
If the relevant user setting is checked, Google automatically records users using their inbuilt microphones, to enable voice-activated features (“OK Google”). And all those interactions give online service providers useful data to “build a simulation of you,” NBC News correspondent Jacob Ward wrote in Why data, not privacy, is the real danger.
For an accountant, who is entrusted with huge amounts of financial and personal data, the likelihood that people really are out to get you is bad news.
According to Netitude founder Adam Harling in AccountingWEB’s best approach to cybersecurity podcast, “phishing is the [most common] method used to gain credentials or access to your email or network system. Ninety-to-ninety-five per cent of breaches start with a phishing attack [to gain] credentials. That is often used to launch a whale-phishing attack, and that will be targeting people with authority to make [or authorise] payment.”
For Harling, people training is a priority at Netitude. “There are some fantastic tools available, products like KnowBe4, where it will actually phish your users [and] show you who’s opened the emails. Then you can target your training for those users.”
Standard security measures involve strong passwords, only opening links from verified addresses, monitoring BYOD (bring your own device) and MAM (mobile application management). Specialised cybersecurity software such as ThinkShield and Nordlocker can provide end-to-end encryption to protect data in the event of any breach.
Following a “just culture” within companies where employees can openly admit to security violations gives IT teams more time to respond to data breaches.
Data: A processed conclusion
Though virtual, data shares some characteristics with other sought-after commodities. The higher their value, the greater the level of threat involved.
Just because your gold is locked and sealed in an “impenetrable” vault, it doesn’t make definitively safe. If you can access it, then someone else can. The seemingly unlimited value of data and the vast variety of places where it is stored vastly expands the potential risks.
The tales of auditors losing USB sticks or laptops containing companies’ entire transaction histories are true – but surely the arrival of online repositories and AI-powered has made that elementary mistake a thing of the past.
For any professional with data responsibilities, one of the key requirements is staying up-to-date on current forms of cybercrime and prevention. But don’t focus solely on the compliance side of the equation. On the value side, accountants can open up all sorts of new opportunities by learning to exploit new big data tools and techniques.