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Cyber

What are the business risks of digital communications?

12/2022
digital communications

Tailored, digital-first customer experiences are on the rise, and providing seamless products, services, and communications that work around the unique needs of different generations is rapidly becoming a business priority. That’s according to 86% of the executives surveyed as part of the research Chubb conducted in partnership with Accenture.

In fact, delivering this type of digital experience is one of the top priorities for small and medium-sized businesses. And it’s even more relevant in the wake of COVID-19, when finding new, virtual ways of reaching customers has become a business necessity.

 

Digital can be a weapon — or a weakness

Today's customers expect the businesses they deal with to be ‘always on’, and constantly evolving to provide the best possible service in a seamless, cohesive way. New digital technologies and multichannel communication systems make this 24/7 contact possible, but even the most sophisticated tools come with weaknesses that need to be addressed.

With services delivered on demand and in seconds, there’s a lot more scope for things to go wrong — especially considering the needs of different generations. The best way to talk to a millennial might not work for a retired customer, and there’s always a risk of sending out incomplete, incorrect, or inappropriate information en masse.

Even giving a customer access to support through an instant digital channel like web-based live chat has risks. If an ill-considered response is considered defamatory, a business might face massive reputational damage, or a defamation suit. Similarly, if a chatbot algorithm malfunctions, it may provide a customer with incorrect information. If this leads to a customer purchasing the wrong item, or using a product incorrectly, the consequences could include damage to themselves or their property, introducing another level of liability.

As an added danger, personalisation relies on data collection. This data is often personal or financial in nature and protected by laws such as the Privacy Act in Australia. Breaching these regulations, even by accident, can open a business up to severe penalties and fines, as well as loss of business.

 

Reducing the risks that come with digital communications

Now more than ever, the benefits of digital communication and personalisation across multiple channels are too significant for businesses to ignore. But if adoption of a digital-centric approach is inevitable, how can they protect themselves against the related risks?

Adopting new technologies quickly (without considering the consequences) could lead to unnecessary exposure. Business leaders can educate themselves about the risks by partnering with experienced service providers that can clearly lay out the relevant threats and provide specialised tools and processes to protect against them.

But it’s not just business leaders who need to be aware of the business risks associated with multichannel communications. Investing in high-quality cyber security training for employees is more important than ever in an environment where many staff are working from home and accessing sensitive data remotely.

Finally, a comprehensive cyber insurance package designed for small and medium-sized businesses is an invaluable last line of defense that makes it easier to pick up the pieces if something does go wrong.

By working closely with the relevant partners and making sure they’ve spent the time needed to safeguard their operations, even the least tech-savvy of business leaders can make sure that any potential vulnerabilities are understood and accounted for within their organisation.

This content is brought to you by Chubb Insurance Australia Limited (“Chubb”) as a convenience to readers and is not intended to constitute advice (professional or otherwise) or recommendations upon which a reader may rely. Any references to insurance cover are general in nature only and may not suit your particular circumstances. Chubb does not take into account your personal objectives, financial situation or needs and any insurance cover referred to is subject to the terms, conditions and exclusions set out in the relevant policy wording. Please obtain and read carefully the relevant insurance policy before deciding to acquire any insurance product. A policy wording can be obtained at www.chubb.com/au, through your broker or by contacting any of the Chubb offices. Chubb makes no warranty or guarantee about the accuracy, completeness, or adequacy of the content. Readers relying on any content do so at their own risk. It is the responsibility of the reader to evaluate the quality and accuracy of the content. Reference in this content (if any) to any specific commercial product, process, or service, and links from this content to other third party websites, do not constitute or imply an endorsement or recommendation by Chubb and shall not be used for advertising or service/product endorsement purposes. ©2020 Chubb Insurance Australia Limited ABN: 23 001 642 020 AFSL: 239687. Chubb®, its logos, and Chubb.Insured.SM are protected trademarks of Chubb.

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