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STAYING AHEAD IN THE DIGITAL AGE
Innovating from within is the top complexity facing businesses across Asia Pacific and the vast majority of executives in our survey expect new technologies to disrupt their industries. In answering the call from industry challengers, corporations have a variety of options at their disposal, a toolbox of tech solutions called the ABCDE – artificial intelligence, big data, cloud computing, distributed ledger technology, and e-payments – of digital advances. Corporations across all industries can use these to embrace a culture of change and become more innovative in their markets.
ARTIFICIAL INTELLIGENCE (AI)
From virtual assistants to automated workflows, AI has the potential to have a profound real-world impact on businesses in all industries. Yet, for the most part, this technology remains an elusive curiosity as executives seek answers to several key questions on AI's applicability within their organizations.
Aside from the obvious legal and regulatory issues, several other concerns stand out. Existing laws stipulate that AI cannot be awarded copyrights for creations (literary, art, or otherwise) they produce, raising questions on who holds ownership and, perhaps more importantly, where responsibility falls in the event of copyright or intellectual property (IP) violations. With the right approach, those companies that experiment with AI are most likely to establish a sustainable, industry leading competitive edge. For some, this will mean taking advantage of regulatory "sandboxes" set up in various jurisdictions, while for others it means limited trials in which experimentation and failure is an accepted part of the process.
Now, more than ever, businesses want to access the treasure trove of insights – and potential new revenue streams – locked within the mountains of data at their disposal. As the world becomes more digital and interconnected, almost any smart device can produce and collect information, presenting both challenges and opportunities as big data is only likely to get bigger. Making big profits out of big data, then, requires the use of advanced analytics in addition to a comprehensive understanding of legal ramifications of data use and protection.

Uncertainties around how to harvest this data, and how to keep it safe, are often the biggest roadblocks. Individual consumer privacy rights are a sensitive issue, as customers are given more rights over their data and how it is shared. A combination of big data advisory services and legal advice is a very good place to start, or refine, a big data insights program.
BIG DATA
CLOUD COMPUTING
The cloud is evolving and being used to enhance much of the innovation that is currently driving technological change today. With entire infrastructure text being stored remotely, cloud technologies are the driving force behind Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS), with applications in e-payment and blockchain solutions becoming increasingly common.

In choosing a cloud service provider, businesses should seek legal advice and conduct due diligence prior to signing. By doing so, businesses can ensure they are only working with reputable service providers that have robust cybersecurity and data protection mechanisms in place, minimizing risks and liability associated with cyberattacks, data loss, privacy breaches and service interruptions.
DISTRIBUTED LEDGER TECHNOLOGY (DLT)
DLT enables countless applications and can improve operational inefficiencies, particularly around risk management. DLT has come into play during local and cross-border payments and settlements, as well as trade finance. More recently, it has been at the center of the initial coin offering (ICO) debate, now that China has banned fundraising through token-based digital currencies. Many other industries from supply chain to healthcare and beyond are also keen to unlock the value such technologies promise. Given its complexity, several legal questions arise. Are the tokens used in DLT transactions a valid and recognizable form of ownership, and how can such ownership be proven? Cross-jurisdictional personal data protection is also a key concern. Particularly for permission-less public ledgers, there is the liability question of who should take responsibility for the ledger if no one owns or centrally controls it. As such, corporations may want to seek third-party advisors or legal advice prior to navigating the rapidly changing regulations in each market as they adapt to the increasing prevalence of DLT. That being said, progress is already being made on this front.
84%
of corporate executives expect to see major technological disruption in their industries within the next two years.
Companies looking to adopt a culture of innovation should consider setting up a venture capital arm to invest in tech companies, instead of restricting themselves to conventional in-house R&D. Investing in tech companies around the world enables corporations to import the latest advances and innovations quickly, effectively, and in line with the pace of change in the market.
Komkrit Kietduriyakul, Partner, Bangkok, Baker McKenzie
Innovation begins with engagement, and this means being aware of industry disruption, and investing time, money and effort to try out ideas and potential solutions for the long run. It means adopting a tech start-up mindset and collaborating with partners and customers to make the right conditions available to the relevant talent.”
Adrian Lawrence, Partner and Head of Asia Pacific Technology, Media and Telecommunications, Baker McKenzie
What else does Adrian Lawrence have to say?
E-PAYMENTS
As e-payments gain popularity in Asia, many new e-payment technologies are leap frogging traditional payments. DLT is helping to make this more efficient and cost effective, and central banks in many jurisdictions including Singapore, China and the UK are among those exploring ways to use sovereign cryptocurrencies. From the legal angle, payment service providers need to address the key concerns within their local and regional regulatory regimes, including those that focus on IT and data security. IT security needs to comply with the guidelines set by the relevant regulators, including anti-money laundering and counter-terrorism financing requirements as well as consumer protection. As with all of these areas, companies should be examining each jurisdiction they operate in to understand the most demanding regimes and consider those as their benchmark.
LEARNING TO LEAD: KEY CONSIDERATIONS IN TECH
Make the most of AI advantages by experimenting first in regulatory "sandboxes", where available, and limited trials within individual business divisions before expanding to the whole organization. Harnessing the power of a big data insights program starts with assessing organizational security protocols to protect customer data as it is collected and analyzed. Cloud computing is only as good as its service provider. Thorough due diligence of cloud vendors to ensure they deploy robust cybersecurity and data protection mechanisms can help reduce exposure to cyber risks and data breaches.
While touted as "revolutionary", distributed ledger technology is still very much in its infancy – risks will be high, but so will rewards for corporations that successfully embrace this technology. Start by assessing the legal and regulatory complexities of DLT, especially as it relates to cross-border personal data protection. Consumer data protection, anti-money laundering and counter-terrorism financing requirements are just the tip of the iceberg of issues corporations must consider when offering e-payment options for customers. Avoid litigation by remaining compliant with local data security regimes.
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