Asia Pacific

Securing smart cities in the age of IoT and AI (Enterprise Innovation)

Asia Pacific is becoming a hot bed of smart cities. According to ABI Research’s Smart City Ranking, Singapore, Tokyo, Seoul, Shanghai, and Beijing are among the top 10.

IDC also studied 148 smart city projects in the region. Out of them, those that led the pack were in China, Taiwan and Singapore, followed by Thailand, Australia, New Zealand, South Korea, Hong Kong, and the Philippines. Key areas addressed in these projects were smart buildings, sustainable infrastructure, transportation, public health and social services. While the region fosters smart city initiatives, organizations must be aware of the cybersecurity issues that could affect their outcomes:

The threat landscape is evolving

Attacks are evolving in the region and becoming more emboldened. Top malicious activity areas include China, South Korea, and Vietnam, according to the CenturyLink 2018 Threat Report. In Singapore, the country temporarily halted Smart Nation initiatives due to a healthcare data breach. Around 87% of Thai companies have reported experiencing data or monetary loss due to cyber attacks. Hong Kong and Taiwan were also recent victims of ransomware. An attack hit Hong Kong’s healthcare systems, taking place over a period of two weeks, while WannaCry successfully struck the world’s largest contract chipmaker in Taiwan. While cities are getting smarter, threats are also following suit.

Digital capabilities like IoT have their own vulnerabilities

Smart cities are one of the main drivers of digital transformation. By 2021, approximately 60% of Asia Pacific’s GDP will be derived from digital products or service and grow by 0.8% CAGR annually. One of the three top benefits of this evolution is smarter, safer, and more efficient cities. Furthermore, the Asia Pacific region is expected to come second (US$412 billion) only to the US’s spending of US$437 billion on digital technologies in 2018. Key technologies driving this acceleration include cloud, Internet of Things (IoT), and Artificial Intelligence (AI). Organizations in Asia-Pacific will be installing more sensors, cameras and other connected devices this year, spending as much as US$291.7 billion on IoT.

The region’s cloud spending will also reach US$15 billion this year. China will be the largest country market for public cloud services in 2018 with its US$5.44 billion spending, which makes up about 36.1% of the region’s expenditure. Australia (US$2.85 billion) and India (US$2.12 billion) follow in the second and third places.

But IoT, cloud, and data are opening up the “attack surface” for smart cities. In the case of IoT, there are no industry security standards, which could lead to increasing vulnerabilities. High-profile threats like Mirai and Gafgyt exploit IoT devices to create botnets for DDoS attacks. Meanwhile, the number one concern of moving to the cloud is security.

As more enterprises and organizations adopt new digital capabilities and tools, IT systems become too complex running on different architecture designs and brands of equipment, making it difficult to identify back doors vulnerable to cyber attacks. Hence, a smart city not only has to work better and faster, but also safer.

Massive networks across geographies lead to compliance roadblocks

While organizations tap the benefits of insights from their wealth of data, it also makes them susceptible to compliance risks. Many MNCs are setting up operations and regional headquarters in countries like Singapore, which means that their systems have to interact across different geographies. An estimated 37,400 international companies have their headquarters in the city state, including 7,000 MNCs, while more than half run their Asia Pacific operations out of Singapore. In Hong Kong, there are also over 1,400 regional HQs.  

Moreover, digital transformation has blurred the lines between customer, organization and third-party networks, making it hard to keep track of where data is stored, used, or consumed. Companies are also increasingly turning to third-party vendors. Over half in Asia Pacific say they want to use an IT service or telco service provider for digitization, which may mean that the data is spread across geographies and subjected to different regulations.  Key regulations that are important today include Europe’s GDPR, Singapore’s PDPA and OSPAR as well as Hong Kong’s PDPO. They govern the use of data—be it personal or financial —and organizations in smart cities cannot afford to ignore these mandates.

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Enterprise Innovation

16 October 2018

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