Smart cities aim to create more efficient, sustainable and liveable urban environments, but also introduce new cyber security challenges. Find out about smart cities and their third-party risk management implications in this new article.
Smart cities aim to create more efficient, sustainable and liveable urban environments, using integrated technologies to support economic growth and improve the quality of life for citizens. However, the introduction of vast data-hungry technology networks as well as the unprecedented integration of systems within smart cities raises concerns about data protection, privacy and cyber security. In this article, we explore the challenges that smart cities will pose for third-party risk management.
Smart cities are urban centres where technology is used to manage and deliver more efficient, responsive and sustainable infrastructure and services. By harnessing advanced technologies, city authorities and developers around the world are attempting to optimise the way cities function – to stimulate economic growth and improve the quality of life for residents, while minimising environmental impacts.
Smart city initiatives worldwide prominently include such grandiose projects as NEOM in Saudi Arabia, but also projects such as Telosa in the US and Xiong'an New Area in China. Today, Singapore city state is regarded as an exemplar of an incipient smart city, already incorporating sensors and internet-connected cameras to monitor and manage everything from traffic congestion and crowd density to energy use and street cleanliness.
Smart cities rely on data gathered in real time by vast networks of Internet of Things (IoT) devices, cameras and sensors. This data is processed using advanced analytics and artificial intelligence to inform rapid decision-making on service delivery, information provision and the efficient management of infrastructure and resources.
Residents and visitors can access up-to-the-minute information on, for example, parking spaces, traffic conditions, air quality or service availability. The technology can be used to enhance the provision of public services, from healthcare and education to water and waste management.
Smart cities also use technology to improve sustainability. Smart electricity grids use digital technology to monitor energy demand, production and distribution to minimise waste and maximise renewable energy use. Energy-efficient buildings incorporate intelligent building management systems to align heating, lighting and cooling with real-time demand. Environmental impacts are minimised through intelligent transport systems too, which use sensors and cameras to manage traffic flows and reduce congestion, while optimising public transport services.
The operation of smart city infrastructure and the delivery of essential services relies on huge volumes of data being collected, analysed and transmitted rapidly every minute of every day. This requires a multitude of systems and software to continuously gather, process and disseminate data at high-speed.
The reliability and availability of these systems is vital to the functioning of the smart city, meaning they must be protected constantly against the risk of failure or cyber-attack. Critics of smart cities fear that data security and privacy could easily be compromised in such complex, dynamic IT networks – exposing individuals, organisations or entire cities to the consequences of hacking and data misuse.
The highly interconnected nature of systems and devices in a smart city require a holistic approach to cybersecurity and risk management. Smart city planners, developers and authorities need to prioritise the ongoing resilience of their systems, including not just prevention but also mitigation and recovery.
Smart cities could transform urban living in the future, unlocking economic value and improving social wellbeing, while enabling more efficient and sustainable resource use. However, developers need to be cognisant of the cyber security and digital supply chain risks of creating complex data-driven, highly integrated systems and services in our cities. These risks need to be carefully managed through robust third-party risk management, cyber security and operational resilience strategies – allowing smart cities to fulfil their bold mandates without compromising the welfare and security of their citizens.
Look out for future articles from Risk Ledger on how third-party risk management can be deployed to protect organisations and supply chain partners.
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