Digital vulnerability rattles Asian transport industry

Digital vulnerability is the risk that most worries top executives in Asia’s transportation industry, according to a new study by Willis Towers Watson.

The study of 350 c-suite executives in the transport industry globally, with 71 in Asia, highlighted the need to elevate managing cyber threats to a board-level responsibility.

The Willis Towers Watson 2016 Transportation Risk Index looked at perceived threats over the next decade, coming at a time when supply chains in the region are becoming increasingly digitalised and interconnected, prompting tighter regulation of data protection and disclosure of breaches.

“Digitalisation’s impact is felt across business sectors, and the transport sector is no exception when you consider the growth of Internet of Things, artificial intelligence, driverless cars, robo-workers and smart cities,” said Mark Hue Williams, head of transportation industry for Willis Towers Watson.

Hue Williams added that digital risk mitigation is not the exclusive responsibility of risk managers or IT managers.

“Cyberattacks and resulting breaches have broad technical, financial, operational and reputational consequences,” he said.

Survey participants were asked for their views on 50 specific risks under five broad categories, or megatrends.

Executives from Asia ranked digital vulnerability as the top megatrend and gave it a risk score higher than any other region.

The cyber threat was top of the list of specific transportation risks, followed by third-party security vulnerability, particularly in the supply chain, and changes in demand owing to macro- economic conditions.

To solve such issues, Williams suggested that organisations need to take a holistic view – one that includes their organisational culture – and form strategies accordingly at a corporate level.

“In addition, risks lie in each link of the supply chain. So there’s a collective responsibility to which every participant in the supply chain must be accountable, not only to their shareholders but also to their business partners,” said Williams.

Asia and Australasia megatrend rankings

1. Digital vulnerability and rapid technological advancement

2. Geopolitical instability and regulatory uncertainty

3. Changing market dynamics and business model insecurity

4. Complex operating models in an interconnected world

5. Talent management and the complexities of a global workforce

Top 10 specific transportation risks for Asia and Australasia

• Increased security threat from cyber and data privacy breaches
• Third-party security vulnerability digital supply chain resilience
• Change in demand due to macro- economic conditions
• Staff retention
• Inability to keep up with pace of change and technological advancement
• Illiquidity and the availability of competitive capital
• Increased complexity of regulation
• Pricing strategy pressure
• Threat from new and emerging competitors
• Globalisation of customer base