Kroll Report: Social media generates risk on multiple fronts for APAC businesses

For all its benefits, social media is becoming an increasingly prevalent business risk in APAC, according to research conducted by Kroll.The annual 2019 Global Fraud and Risk Report reveals that 42% of APAC businesses suffered from leaks of internal information with the global average only slightly lower at 39%. This figure highlights growing internal threats to intellectual property, trade secrets, and other confidential information.To deal with this problem, almost two-thirds (64%) of APAC business leaders surveyed (In line with the global average) cited that social media was a priority when developing a defence strategy for their organisations.Data theft and reputational damage caused by third-party relationships were next on the list of significant incidents, with 29% of global respondents affected this year. Data theft was particularly serious in APac, where 39% of Chinese and 41% of Indian businesses reported incidents.The means with which businesses identified data theft varied considerably. Regulatory and legal enforcement revealed theft in 38% of Chinese incidents, but only 12% of global instances. On the contrary, internal audits identified data theft in 37% of global incidents, but only 22% across APAC.China's emergence as a critical link in the global value chain has also made organisations there vulnerable to intellectual property (IP) theft, as 48% of Chinese respondents said they have experienced IP theft. double the global average.Information theft, loss, or attacks were cited as the most prevalent type of fraud experienced for the first time in 10 years in last year’s survey, with 29% of respondents saying they were affected by it. The same amount of respondents said reputational damage due to third-party relationships was another major issue.“Evermore complicated supply chains and third-party partnerships require strict diligence to ensure that a third party’s failure does not undermine the reputation and security of other partners," said Reshmi Khurana, managing director and South East Asia head of business intelligence and investigations at Kroll."This comes at a time when the speed and reach of social media to present an alternative interpretation of how a business may wish to see its brand and values perceived requires a vigilant attitude, and for appropriate response strategies to be in place," she added.Emerging technologies are already being adopted to act as countermeasures, with nearly all (91%) global business leaders surveyed were exploring the possibility of incorporating, or have already incorporated, blockchain technology. 81% of them were investigating cryptocurrencies or have incorporated cryptocurrencies into their business.However, 35% of businesses cited risk of fraud or theft as the primary concern when considering investment in these areas, followed by lack of clear regulatory oversight (29%), the untested state of this technology (19%), and potential involvement with malicious entities (16%).As for other challenges, 84% of businesses felt threatened by market manipulation through the spread of fake news - most of them were fuelled by social media. Commonly used brand ambassadors and influencers also presented a new challenge for due diligence procedures, since 97% of respondents said they have resorted to them to help grow the business. Organisations were advised to not only vet brand ambassadors and influencers but also their wider digital network as a whole.