News Risk Management04 Apr 2018

Cyber risk management will be key challenge in 'smart' cities of the future-study

04 Apr 2018

Cities in Asia Pacific are getting smarter, but they must be ready for the cyber security risks that accompany the growing adoption of tech-enabled real estate and infrastructure, according to a new report.

The Clicks and Mortar: The Growing Influence of Proptech study by real estate services company JLL and startup community Tech in Asia analyses the convergence of real estate and technology in 13 markets across the region and the ways that emerging technologies are being applied to connect urban real estate, infrastructure and services.

It noted that ‘Smart cities’ initiatives are being implemented across the world and Asia, notably in countries like India, China, Japan, Korea and Singapore. The latter’s ‘Smart Nation’ blueprint, launched in 2014, is well under way of execution, while just recently, a US$23 million ASEAN-Australian investment fund was announced to support smart cities in Southeast Asia.

A ‘smart city’ generally refers to an urban area that uses different types of electronic data collection sensors to supply information which is used to manage assets and resources efficiently.

JLL Asia Pacific COO Albert Ovidi noted that while ‘proptech’ (property technology) is a key tool in the future development of cities and digital infrastructure investment is increasingly important for cities to create more liveable environments and attract and retain the best talent, the  region's acceleration in the use of the Internet of Things (IoT) and high reliance on data collection and analysis means it is imperative for smart cities to develop effective safeguards against cyber risk."

Potential pitfalls

According to the report, as the real estate industry becomes more technologically advanced, it has increased exposure to such cyber risks. Though many proptech startups service the residential market, the commercial sector is not immune. In fact, property owners and tenants face pressures due to the rise of smart buildings where they have building management systems on their smart phones.

"Many of the exciting innovations being developed in the proptech sector, such as smart home controls or drones for property management, have the potential to improve user experience, and save time, money and energy," said JLL Asia Pacific CIO George Thomas.

"As a firm, we are committed to harnessing the latest technology to provide new products and services for our clients. But we also have to consider the implications of data security and privacy as the sector evolves."

New technology to combat cyber risks

Fortunately, cyber policy initiatives across the region are also developing in tandem with advanced proptech tools, said the report. Governments are working towards reinforcing domestic information systems security, collaborating with international partners for intelligence sharing, improving threat identification, and protecting critical infrastructure.

One trend the report singled out is the convergence of blockchain and IoT (BIoT), a potential solution to combating cyber risks. BIoT is expected to unleash a new range of services and businesses, among which smart buildings and homes would benefit. BIoT would allow real-time access to data from sensors, with blockchain offering protection. Most importantly, it would build trust, reduce time and accelerate transactions.

"As the proptech space evolves there are huge opportunities for real estate owners and occupiers," adds Mr Ovidi. "Smarter cities and workplaces bring incredible prospective value. But in order to reap their full benefits, we have to prioritise systemic resiliency to ensure we manage the potential risks."

For more information, the full report can be found here.

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