In an era where digital innovation drives business growth, cybersecurity has emerged as a crucial concern for organizations of all sizes. From the rise of artificial intelligence (AI) to the increasing sophistication of cyber threats, companies must navigate a complex landscape to protect their assets and maintain client trust.
Fintech.ca sat down with Walid Khayate of BFL Canada to delve into key strategies for cybersecurity, exploring topics such as the role of cyber insurance, the integration of IT and OT security, and how AI is shaping risk management and client service in the insurance industry.
Khayate is the Risk Consulting Practice Leader at BFL Canada in Montreal and has extensive expertise in enterprise risk management, cyber risk management, risk modeling, risk engineering, and business resilience, he plays a pivotal role in guiding organizations through complex risk landscapes.
Cyberattacks seem inevitable in today’s digital landscape. What are the first steps companies can take to prepare for these risks?
WK: Preparation starts with understanding your organization’s unique risk profile and the value of your data. Companies often assume that cyber defence is just a matter of firewalls and anti-virus software. In reality, however, it requires a strategic approach that covers both IT and operational technology (OT) security (if applicable). At BFL CANADA, we work with clients to identify vulnerabilities, implement incident response plans, and continuously monitor their digital environments. The next crucial step is integrating cyber insurance into this framework—it’s a safety net as critical as fire insurance is in today’s risk landscape.
It’s also important to note that 88% of cyberattacks are a result of human error, making employee training and ongoing education paramount.
How can data aggregation and centralized data management improve risk assessment and client service?
WK: Data aggregation offers a holistic view of risk, client needs, and market trends, improving underwriting accuracy and enabling personalized services. Centralizing data streamlines operations, reduces redundancies, and provides clients with tailored recommendations based on a broader dataset. This approach is particularly beneficial, as it enables us to proactively identify potential coverage gaps and recommend solutions that match each client’s unique risk profile.
How can companies strengthen their IT and OT security environments?
WK: IT and OT systems often operate on separate networks and protocols, yet both can be susceptible to cyberattacks. Bridging these environments with an integrated cybersecurity strategy is vital. We advise businesses to conduct regular vulnerability assessments and penetration testing on both fronts, therefore ensuring comprehensive coverage, and, of course, to implement regular employee training. Combining these security measures with cyber insurance provides a financial safeguard should an incident occur.
What challenges do organizations face in balancing the benefits of AI with cybersecurity risks?
WK: While AI provides an array of operational efficiencies, it also introduces new vulnerabilities, such as privacy concerns and exposure to hacking. To mitigate these risks, organizations must implement robust cybersecurity practices alongside their AI systems. Encryption, strict access controls, and comprehensive security protocols are essential to protect sensitive data and ensure AI deployments remain secure.
How do you foresee the evolution of AI’s role in cyber risk management?
WK: AI will play an increasingly significant role in predictive analytics, helping anticipate cyber threats before they materialize. Its ability to detect patterns and anomalies in real time will become instrumental as an early warning system for potential cyber incidents. At BFL CANADA, we’re currently exploring how AI can enhance our risk assessment models, allowing us to provide clients with proactive insights to better protect themselves. This predictive power will be key as cyber threats become more sophisticated.
How has the rise of AI impacted the insurance industry, particularly for risk management and claims handling?
WK: AI has revolutionized how we manage repetitive and data-intensive tasks and has freed insurance professionals to focus on more complex aspects of client service. For example, AI streamlines claims processing by automating data verification and flagging inconsistencies, therefore accelerating the process for both insurers and policyholders.
Given the expectation of 24/7 service, how can AI support client experience in the insurance sector?
WK: AI-driven tools like chatbots and virtual assistants are transforming client service by providing instant responses to common queries, even outside business hours. This capability ensures that clients don’t have to wait for assistance, thereby enhancing their overall experience.
To keep pace with this evolution, insurance professionals must develop expertise in AI technology, data analytics, and customer relationship management. Continuous learning and adaptability are key, as technology and client expectations evolve. Focusing on understanding AI tools, interpreting data insights, and effectively communicating tailored solutions will ensure professionals meet client needs in this dynamic landscape.
In what ways can AI help insurance professionals better understand and respond to client needs?
WK: AI enables professionals to access data-driven insights, which help us accurately understand client preferences, risk tolerances, and coverage needs. With heightened analysis of client data, personalized insurance plans that align precisely with clients’ unique needs can be developed. This approach enhances the buying experience, empowering clients to fully understand their coverage. Moreover, AI allows us to spend less time on administrative tasks and more time engaging with clients in meaningful ways.
What are some common misconceptions companies have about cyber insurance?
WK: A widespread misconception is that cyber insurance is only essential for large corporations or that it’s just an optional add-on. In reality, every business that has data is a potential target, regardless of its size. Another common false belief is that cyber insurance can replace strong cybersecurity measures. Cyber insurance is not a substitute; it rather complements cybersecurity by managing residual risks after preventative measures are in place—it’s part of a broader risk management strategy, not a stand-alone solution. Cyber insurance provides companies with access to cyber experts (breach coach, forensics, etc.), to financial capacity to cover unbudgeted expenses/losses, and to 24/7 support.
What advice would you give businesses hesitant about investing in cyber insurance?
WK: Our world is shifting from one of tangible to non-tangible assets. These are mainly digital assets and represent key assets for many organizations. Since all companies buy property insurance for their assets, you can think of cyber insurance as you would for any other essential business insurance: it’s protection for a critical part of the business. Cyber incidents don’t discriminate—they impact companies of all sizes.
For companies on the fence, we recommend evaluating the potential costs of downtime, data loss, and reputational damage resulting from a cyber event. Compared to these risks, cyber insurance is a relatively small investment that provides essential financial and operational support. We encourage clients to view cyber insurance not as an added expense but as a critical component of business resilience in today’s digital landscape.
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