As we continue to digest the impact of ChatGPT on the world of work, CNBC had an interesting video on how robots are ready to replace humans in the kitchen:
As noted in the report, the industry is poised to save $12 billion in labour costs by replacing "up to 82% of restaurant positions... by robots." The video also highlights the safety benefits that could accrue to fast-food workers with the use of robots. Coincidentally, I was chatting last week with a barista at Starbucks. He mentioned an unfortunate incident where his friend fell into an oil vat while cleaning the equipment. This was not at a small restaurant, but a major one. Finally, the video speaks to the labour crunch that the industry is facing. With over half a million positions to be filled, robots could be the answer restauranteurs are looking for.
Other advantages include the following:
Improved hygiene: Given the impact of COVID-19, many people now view the idea of reducing human involvement in food preparation as a way to ensure a more hygienic end product.
Consistency: By using robots for food preparation, restaurants can ensure that customers receive consistently high-quality food. This can avoid dissatisfied customers, who have had to consume burnt offerings!
Reduced food wastage: Systems can be designed to avoid food wastage and capture excess toppings, etc., to be reused.
"Miso’s flashiest invention is Flippy, a robot that can be programmed to flip burgers or make chicken wings and can be rented for roughly $3,000 a month."
What I found fascinating was how we have been preconditioned by sci-fi movies to expect humanoid robots. Instead, we find an awfully familiar-looking contraption: a rail-car system with a camera and mechanical arm attached. It's pretty similar to what we have seen before in terms of how robots are being used to make lattes, as discussed in this post.
But there is more to the contraption than ‘meets the eye’. The value ultimately is in the software that can bring all the moving parts together. As noted by Mike Bell, CEO of Miso Systems, who manufactures the "frying robot" (taken from the YouTube transcript):
"The hard thing to get right about this product is having the computer vision, the algorithms that plan the cook cycle and the software that manages the robotic motion to all work together so that it's as reliable as a refrigerator and it does the job."
In conclusion, the food industry is looking to save billions of dollars in labour costs by replacing restaurant workers with robots. Though this would save mountains of money we need to look at the society wide impact of such a monumental shift. Personally, working in the fast food industry as a young person taught me a lot before entering the CPA profession, such as the importance of hard work, humility, and empathy. Without such work, where would the youth of today or tomorrow learn such basics? Only time will tell what this means for the future generations that don't have access to such formative experiences.
Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else
With the crypto-ice age in effect, there is some rethinking on crypto and NFTs path in 2023. Here is CNBC's take:
However, there are still a number of key tech trends that Chartered Professional Accountants (CPAs) should be aware of in order to stay up-to-date and competitive in the industry. These trends include cloud computing, artificial intelligence and machine learning, big data, cybersecurity, and digital transformation. By understanding and leveraging these technologies, CPA firms can improve their operations and better serve their clients.
1. Cloud Computing: Cloud computing involves delivering computing services, including servers, storage, and databases, over the internet rather than using local servers or personal devices. CPA firms can benefit from cloud computing by being able to access data and applications from any location, as well as scaling up or down as needed. For more on cloud and the world of CPAs, check out this post.
2. Artificial Intelligence and Machine Learning: AI and machine learning technologies can help CPA firms automate routine tasks, improve decision-making, and gain insights from data. For example, chatbots are now able to generate fully coherent posts using natural-language processing. We covered this in our last post, with the rise of ChatGPT. If you haven't checked it out, it is must read.
3. Big Data: Businesses are generating and collecting a large amount of data from a variety of sources, including financial transactions, social media, and internet of things (IoT) devices. Tools such as data visualization and advanced analytics can help CPA firms make sense of this data and extract valuable insights. In the early days of big data, I put this post together. It captures the hope and potential - much of which still needs to be realized.
4. Cybersecurity: Cybersecurity is a critical concern for CPA firms, as they often handle sensitive financial and personal data. It is important for CPA firms to have robust cybersecurity measures in place to protect against cyber threats such as hacking, ransomware, and phishing attacks. I've always felt that Cyber is a natural extension for CPAs. We're not just versed in the concept of controls, but also the realities of auditing those controls - an increasingly important way of conveying of compliance to a variety of stakeholders. See here for CPA Canada's list of resources.
5. Digital Transformation: Digital transformation refers to the use of digital technologies to fundamentally change how an organization operates and delivers value to its customers. CPA firms can benefit from digital transformation by streamlining processes, improving efficiency, and increasing agility. This may involve adopting new technologies such as cloud computing, AI, and big data, as well as rethinking business models and organizational structures. See here for more on the topic.
In closing, it is important for CPA firms to stay informed about the latest tech trends in order to take advantage of new opportunities and meet the changing needs of their clients. By embracing technologies such as cloud computing, artificial intelligence and machine learning, big data, cybersecurity, and digital transformation, CPA firms can improve their efficiency, effectiveness, and competitive edge. By staying up-to-date with these trends, CPA firms can continue to deliver value to their clients and succeed in an increasingly digital business environment.
Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else
We previously discussed OpenAI in this post. In that post, I closed with this comment:
"We should be aware of the concept of exponential change. Technology, like AI, improves at an exponential rate and not a linear rate. Consequently, monitoring the space is key for CPAs and other to ensure that they see change coming and adapt accordingly."
And so, my fellow CPAs, you need to check out how much AI has advance in the two years since that post. It's absolutely amazing to see how advanced the technology is and how quickly it has come:
YouTube is one thing. But testing it out is another. To be honest, I was about to review the video and then summarize it. Then I thought, why not ask ChatGPT?
Question to ChatGPT: "What are 5 key takeaways for CPAs with respect to ChatGPT?"
Answer:
ChatGPT is a large language model trained by OpenAI.
ChatGPT has a knowledge cutoff of 2021, and it does not have access to the internet or current events.
ChatGPT is able to generate human-like responses to a wide range of questions, but it is important to keep in mind that it is a machine and may not always provide accurate or complete information.
ChatGPT is not a substitute for professional advice or guidance, and it should not be used as the sole basis for making important decisions.
ChatGPT is intended for general informational purposes only, and it is not a substitute for professional judgment or expertise. It is important for CPAs to consult with appropriate sources and to exercise their professional judgment when making decisions.
Reading through the takeaways, it seems like it added an extra dash of risk management. Could it have accounted for our risk-aversion?
Then I thought, why not ask it directly about the video itself?
Question to ChatGPT: "What are 5 key takeaways from It’s Time to Pay Attention to A.I. (ChatGPT and Beyond)"
Answer:
Artificial intelligence (AI) is a rapidly developing field with the potential to significantly impact many aspects of society, including the accounting profession.
AI technologies, such as chatbots and language models like ChatGPT, are becoming increasingly sophisticated and can be used for a wide range of applications.
It is important for CPAs to stay informed about the latest developments in AI and to consider how these technologies may impact their profession and their clients.
While AI has the potential to improve efficiency and accuracy, it is important to carefully consider the risks and limitations of these technologies, including the potential for errors or biases.
CPAs should consider ways to incorporate AI into their practices, such as by using AI tools to automate certain tasks or by providing guidance to clients on the use of AI. However, they should also ensure that they have the necessary skills and knowledge to effectively use and understand these technologies.
Notice how I did not have to tailor this questions for CPAs? ChatGPT automatically brought the context over from the previous question. (As for how good this summary is, you can judge for yourself.)
Then, I decided to ask it about how exponential technologies will impact the CPA profession.
First question, "Will blockchain replace the need for financial auditors?"
Answer:
"Blockchain technology has the potential to revolutionize many aspects of the financial industry, including auditing. However, it is unlikely that blockchain will completely replace the need for financial auditors.
One of the main features of blockchain is its ability to provide a tamper-evident record of transactions. This can be beneficial for auditing purposes, as it allows auditors to more easily verify the accuracy and completeness of financial records. However, auditors still need to be able to interpret and analyze the data contained in these records, and to ensure that the data is consistent with other information and documentation.
Additionally, while blockchain can provide a secure and reliable record of transactions, it is not a substitute for the expertise and judgment of trained financial professionals. Auditors bring a deep understanding of financial principles and practices, as well as the ability to identify and assess risks and potential areas of concern.
Overall, it is likely that blockchain will augment and enhance the role of financial auditors, rather than replacing them entirely."
Notice the nuanced response? It should have spoke to validity, instead of completeness when it came to how the blockchain will assist the auditor. However, it didn't just list all the audit objectives just "to be safe".
Then I asked about artificial intelligence:
Question: "How can AI be used to automate financial auditing?"
Answer:
"Artificial intelligence (AI) can be used to automate certain aspects of financial auditing, such as the analysis and interpretation of financial data. This can potentially improve the efficiency and accuracy of the audit process.
For example, AI algorithms can be trained to analyze large amounts of financial data and identify patterns and trends that may not be immediately apparent to human auditors. This can help auditors to more quickly and effectively identify areas of potential risk or concern.
AI can also be used to automate the testing of transactions and the evaluation of internal controls. For example, an AI system could be trained to perform automated tests on transactions to ensure that they are recorded correctly in the financial records. This can help to reduce the time and resources needed to perform these tasks manually.
Overall, the use of AI in financial auditing can help to improve the efficiency and accuracy of the audit process, while also freeing up auditors to focus on more complex and higher-level tasks that require human judgment and expertise."
Recognize the theme of "race with the machine" in both this response and the previous blockchain response? This is especially integrated into the last paragraph, which speaks to what AI can do versus what "human judgment and expertise" can do. Also, notice how it explains AI role in both risk assessment and testing of internal controls. That is, it had enough where "understanding" to breakdown the response into different aspects of the audit.
When looking at this, we need to ask ourselves: is this inflection point for exponential rise of AI?
Do review the last part of the video, where Samuel H. Altman, CEO of OpenAI, explains how he anticipates the impact of such technology on the legal profession. (The video earlier takes about how Josh Browder's Do Not Pay, will leverage the tech. I had previously seen Browder on a panel in 2016; see this post for the video).
It's not quite a stretch to apply what he says to the CPA profession. There are key differences; in that we opine on financial statements, provide tax advice based on financial data, and the like. However, audit data analytics tech has been around for decades. It's just a matter of getting the different parts to talk to each other.
Clearly, it's early days for ChatGPT and many issues need to be sorted out. For example, it has already earned the moniker "CheatGPT" for how it can be potentially used as a short-cut by students. That being said, it's clearly the biggest watershed moment for AI and the white-collar workforce, since IBM's Watson defeated Ken Jennings and Brad Rutter.
Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else
Sam Bankman-Fried (SBF) was scheduled to testify in front of congress on Tuesday. Forbes caught a copy of his testimony, which is available here. However, this testimony won’t be delivered. Instead, SBF got arrested in the Bahamas. The US Department of Justice (DoJ), in a joint conference with the SEC and CFTC, unveiled the following 8 charges:
Conspiracy to Commit Wire Fraud on Customers
Wire Fraud on Customers
Conspiracy To Commit Wire Fraud on Lenders
Wire Fraud on Lenders
Conspiracy to Commit Commodities Fraud
Conspiracy to Commit Securities Fraud
Conspiracy to Commit Money Laundering
Conspiracy to Defraud the United States and Violate the Campaign Finance Laws
CryptoSlatereported that “the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have both filed separate charges against the ex-CEO…The SEC has charged SBF with offering securities for sale and selling securities for fraud. Specifically, the charges fall under the Securities Exchange Act of 1934 and the Securities Act of 1933 pertaining to anti-fraud provisions…Further, the CFTC charged SBF with fraudulent misstatements and omissions.”
The SEC complaint is available here (and here is their press release). The CFTC’s complaint is available here (and here is their press release). The full press conference is available here.
Video #1 – Will SBF’s Ill Advised Media Tour contribute to his Downfall?
Since the November collapse, SBF has been giving interviews (e.g. NYTimes, ABC, WSJ, BBC). This is of course against the advice of counsel. Regardless, he has been talking up a storm, claiming to be the incompetent CEO and then apologizing for his screwups. That is, he was able to successfully bob-and-weave during these interviews and avoid admission of fraud.
That was until he was interviewed by Coffeezilla.
Coffeezilla admitted he too got outmaneuvered when he attempted to pin him down here and here. However, by reviewing his mistake and the mistake of others, he cornered SBF in this video and got him to admit to the lack of segregation of funds:
SBF, in contrast to his other interviews, got annoyed and accused Coffeezilla of monopolizing the interview time. Coffeezilla easily refutes this claim, noting SBF was factually incorrect. That being said, it would be surprising if this interview is not captured as part of the evidence that the DoJ, SEC, and CFTC will ultimately use against SBF.
Video #2 – WSJ Overview on the Players and Places
The following gives a good overview of what is happening. This includes the jurisdictions involved, the charges laid, and the Congressional hearings that are occurring in parallel.
See here for Coffeezilla’s analysis of the charges. The video also includes commentary from Legal Eagle.
Video #3 – Summary of the Criminality at FTX and Alameda
FTX’s CEO, John J. Ray III, testified before congress about his findings so far. Ray was the same CEO that managed the Enron bankruptcy and has previously said that he has never seen “a complete failure of corporate controls and such a complete absence of trustworthy financial informationas occurred [at FTX]”. This video, from the Washington Post, seems to capture the essence of the criminality that was a foot at the crypto-exchange and the hedge fund:
Video #4 – Did the multi-Billion Dollar FTX use QuickBooks and Slack?
For the poor state of governance and controls, see Ray’s opening remarks during his congressional testimony:
Video #5 – The Nature of Crypto is making it hard for Ray to Locate FTX’s Assets
Locating assets in a bankruptcy is usually a matter of following the paper trail. Admittedly, FTX has poor records as noted in the last video. However, the problem is compounded by the ethereal nature of crypto/digital assets. See WSJ’s summary of Ray’s testimony, which highlights this unique challenge within FTX’s bankruptcy proceedings:
The FTX story continues to evolve. There is definitely more to discuss, as additional details come to light. However, another story that will be explored in future post(s) is the contagion that has spread through the crypto-verse due to FTX and the other collapses in the nascent industry.
Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else.
In our last post, we looked at the epic rise of SBF and FTX. In this post, we examine the Ten Days of November that shook FTX to its core and resulted in its spectacular collapse.
Post #1: The CoinDesk FTX Timeline
The best place to start is this timeline, which is taken from this CoinDesk post. I’ve also added the amount withdrawn from FTX, which was taken from this Reuters article:
“That balance sheet is full of FTX – specifically, the FTT token issued by the exchange that grants holders a discount on trading fees on its marketplace. While there is nothing per se untoward or wrong about that, it shows Bankman-Fried’s trading giant Alameda rests on a foundation largely made up of a coin that a sister company invented, not an independent asset like a fiat currency or another crypto. The situation adds to evidence that the ties between FTX and Alameda are unusually close.”
As noted in the above timeline, this is what prompted Changpeng Zhao (CZ) to tweet this and then caused the billions to be withdrawn, as mentioned in the Reuters article.
Post #3: Prelude to the FTX Collapse
The first of Coffeezilla’s video on the collapse really captures not just the rivalry between SBF and CZ, but the killer-business logic that was potentially at play. Far from the crypto-utopian visions of an egalitarian ecosystem, we see the same sort of cutthroat competition in the banking world itself. For example, one theory holds that Bear-Stearns collapse was triggered in the 2007-2008 Financial Crisis. The reason? Payback. Bear-Stearns did not help out in the Long-Term Capital Management (LTCM) bailout and so Goldman-Sachs returned the favour almost 20 years to the day.
Post #4: FTX and the Mystery of the Stolen Crypto
This video, published 3 days after the last, explores the complex web of relationships that is FTX (far more complex than Lehman), but zooms in on the entanglement between Alameda Research and FTX. The big reveal here is that an Alameda insider noted that “not only did they [Alameda Research] have access to FTX's back end [but] they [also] managed withdrawals for FTX and had a giant line of credit that they could draw on, which seems like partially may have been users funds something that no separate entity would normally have”. The insider was corroborated by the Wall Street Journal.
Post #5: An Inside Look at the Chaos and Ineptitude at FTX/Alameda
Shout out to Tim Bauer for passing on this link from MilkyEggs! (Bloomberg’s Matt Levine, also referred to the post here with all the necessary caveats). It gives more details around the sheer chaos and ineptitude that existed at FTX and Alameda. With respect to the chaos, it gives some details around SBF’s mental state. It is quite the contrast to the image that was portrayed to the outside world, which we saw in the first video in the last post. With respect to ineptitude, it highlights the “farcically simplistic” accounting records the company kept.
In terms of the top three takeaways, it firstly casts doubts on the origin story of SBF. The post alleges (based on an insider) that SBF quickly lost all the wealth he made from those bitcoin US vs Japan arbitrage trades. Secondly, it gives some insight into the inordinate amount of risk SBF was taking. Lastly, it attempts to breakdown the losses incurred by FTX-Alameda. That is, they attempt to piece together where the money - $15.5 billion in total – was spent. Also, do check out the postscript where they “found” another $3 billion in losses. Of course, this is not an official audit or anything like that. However, it’s nice to get a more wholistic understanding of the FTX-Alameda situation – beyond the puff pieces in the mainstream press.
In our next post, we will begin exploring the aftermath of FTX collapse.
Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else.
The recent weeks have seen the fall of crypto-king Sam Bankman-Fried (aka SBF). The epic rise and the spectacular fall of him and his FTX empire has us all asking one question: what happened?
We’ll initially explore this saga over several posts.
In this post, we look at 5 videos that cover the rise of SBF and his FTX crypto-exchange. We’ll start by looking at how he initially got rich through arbitrage trading, look at the FTX “business model”, his connections to the US government, and then close with the celebrity endorsements that helped propel him to stardom.
Video #1: The Benevolent Billionaire?
Probably my first encounter with SBF, was in his interview with Nas Daily. We learn how SBF rose to fame in the crypto space by taking advantage of price differences in bitcoin in the US and in Japan. More importantly, the video captures the hope and the hype around the “earn to give” concept that SBF promoted. Turns out it was all hype and no hope. Vox published their twitter DMs with SBF, where he explains “I feel bad for those who get f***** by it…this dumb game we woke westerners play where we say all the right shiboleths [sic] and so everyone likes us” (link).
Video #2: Did SBF really say that Crypto is a Ponzi Scheme – 7 months ago?
On Bloomberg’s Odd Lot’s podcast aired back in April 2022, SBF seems to admit to Wall Street’s Wiseman Matt Levine that “magic internet money” is a Ponzi scheme. If you don’t have time to listen to the whole podcast, check out Coffeezilla’s quick takes. The technique that SBF discusses appears to have been used in Celsius, which we discussed previously.
Video #3: There are magic boxes, but magic business models?
On a separate but related note, FTX offered high rates of interests to depositors. As shown in Wall Street Millennial’s video, the rates were much higher than the fed rate that was close to zero at the time. This is not so much about the magic money box that SBF referred to in the previous video, but rather pure magic. How else can we explain the sustainability of such a high interest rate on bitcoin/Ethereum deposits? As CPAs know, when expenses exceed revenues – a business failure is inevitable. (Click here to go to the timestamp where they discuss the issue of interest rate deposits)
Video #4: If you’re for regulations, you’re one of the good guys – right?
Stepping back, Cold Fusion’s video gives a good broad understanding of the key events that happened with the rise and sudden fall of FTX. (The previous video is also quite good as well). That being said, this video takes time to highlight SBF’s connection with the government and regulatory bodies.
Firstly, his mom is connected to the Democratic party. Secondly, he testified before congress, donated to both parties (not just the Democrats), and met with Gary Gensler from the SEC. If you look carefully at the screen shot where he speaks about the meeting with Gensler, you may recognize IEX’s Brad Katsuyama. (Reuters reported here on this meeting). He’s the protagonist of Michael Lewis’s Flash Boys. And that’s not the only connection to Lewis. Reports have emerged that Lewis had spent 6 months with SBF and is planning to publish a book about him. Lastly, there is an odd connection between FTX’s CEO, Caroline Ellison, and Gary Gensler. As Cold Fusion points out, Caroline’s father, Glenn Ellison, was Gensler’s boss at MIT.
Video #5: Is FTX a smart bet, with all these celeb endorsements?
Both Wall Street Millennial and Cold Fusion pointed out the role of influencers played in pumping the FTX/SBF brand name. But we don’t just need to take their word for it. We can see it for ourselves. Some of the promo videos are still live on FTX’s YouTube Channel. This video features Canada’s own Kevin O’Leary:
If you didn’t have a chance to go through the whole video, check out this part where he and the host emphasize the compliance-orientation of SBF and FTX. Now, that definitely didn’t age well. But perhaps what’s more surprising is O’Leary’s comments post-FTX meltdown. Apparently, he would back SBF in another crypto-venture (link).
Lastly, if you are interested in seeing the actual adverts aired on TV, check out this one featuring the actor Larry David.
In our next post, we’ll look at some more videos that take a closer look at the “Ten Days in November” that broke FTX and could have possibly ushered in the “Crypto Ice Age”.
Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else.
In ourlast post, we looked at the Great Rogers Outage of 2022.
Millions of Canadians experienced life without mobile and Internet service – a necessity in our pandemic life. The cause was traced back to a system-change gone wrong. It appears that though Rogers had tested some parts of the planned change, it was insufficient to identify all the issues. The result was that the network got flooded with traffic and then the systems went down.
What are some lessons we can learn from this outage?
Major Controls Frameworks, like COBIT and ISO27001, and audit standards, like SOC2, require that management implement change management controls. Consequently, the outage presents a unique opportunity to understand what can go wrong when it comes to change management. Moreover, it highlights what types of controls are relevant from a real-live scenario - as Rogers documented in its submission to the CRTC.
With that in mind, let’s look at four lessons from the Great Rogers Outage of 2022.
Lesson #1: The Importance of Redundancy
When commenting on the impact of the outage on governments within Canada, Rogers noted: “It is important to note that in most of the cases, we provide a portion of the telecommunications solution, but not all underlying services. Many institutional customers have redundant services” [emphasis added].
Also, as previously noted that they had “established reciprocal agreements between Rogers and Bell, and between Rogers and TELUS, to exchange alternate carrier SIM cards in support of Business Continuity.”
The implication of this lesson is that we should try to diversify the telecom providers within our professional and personal lives. For example, my personal device is provisioned through Fido (a Rogers sub-brand), while my work cell is provisioned through Bell.
Lesson #2: Test, Test, Test
They say in real-estate it’s about location, location, location. In change management it’s test, test, test. In the aftermath of the outage, Rogers doesn’t deny that they need to review their change implementation process:
“Most importantly, Rogers is examining its “change, planning and implementation” process to identify improvements to eliminate risk of further service interruptions.”
To be fair, it’s not like there was no testing done. Instead, Rogers had used a phased approach to rolling out the change:
“Concerning the July 8th outage, the proposed activities were very carefully reviewed, as we normally do with all network changes. We validated all aspects of this change. In fact, we had begun introducing this change weeks ago, on February 8th and had already implemented successfully the first five (5) phases in our core network.” [emphasis added]
It’s a good reminder that in the world of IT General Controls, and IT Risk Management more broadly, it’s not about what goes right but what goes wrong. Consequently, companies should ensure that the scenarios tested are comprehensive enough to identify hidden assumptions or dependencies. For example, Rogers had a procedure that relied on “alternate carrier SIM Cards”. Hypothetically, testing whether this worked ahead of time could help identify whether the employee could find their SIM cards or how they activated such SIM cards when they have no Internet.
Lesson #3: Planning Crisis Communications from Content to Channels
According to the Rogers submission, the company conducted the following communications:
“During the outage, Rogers communicated with customers across several different channels, including social media, media outlets, Rogers Sports & Media properties, website banners, virtual assistants, interactive voice responses (“IVR”), public service announcements and community forums. In addition, Rogers’ CEO conducted broadcast interviews with CP24, Global News, CTV News, BNN, and CityNews. Rogers SVP of Access Networks & Operations also conducted broadcast interviews on CBC and CityNews.”
The following CBC news clip illustrates what was communicated and how:
As can be seen, the reporter was a little surprised that they got message from the IT team – instead of Rogers themselves. However, Rogers did admit that they “will be updating [their] plans and procedures”. Specifically, they plan to:
Equip the communications team with “back-up devices on [an] alternate network”
Bemore timely“in posting details to customer care channels, web properties, social media, as well as public service announcements (“PSAs”) across media properties”
Provide more frequent updates “even if there is limited or no additional information to share”
Determine an alternative way for the communications team to authenticate themselves, when the second-factor registered with the social media service is reliant on “a device on the Rogers network”
Provide specific “status of critical services (such as 9-1-1), how they may be impacted by the outage, and advice for customers”
The outage is a good illustration of how critical crisis communications can be. Maintaining effective communications with customers or other stakeholders is key to minimizing the reputational damage that such incidents can potentially have.
Lesson #4: Monitoring
The final takeaway is the importance of having resources and tools to monitor the restoration efforts. That is, the fixes deployed may not resolve all the issues. Rogers reported the following results with respect to bringing things back online:
“Once the technology team confirmed stability of our core network, and that traffic volumes were returning to normal level across the network, we proceeded to inform customers that our network and systems were returning to fully operational service for the vast majority of our customers. We also notified them that some customers may experience intermittent issues, and that our technology teams are monitoring and would work to resolve any issue as quickly as possible.” [emphasis added]
As can be seen, Rogers was able to restore the service for the vast majority of customers. However, there were a few that still experienced lingering issues. Consequently, it’s important to have continuous monitoring in place to ensure that the service is restored fully before returning to business as usual.
Closing thoughts
The incident highlights how dependent society has become on the wireless carriers for the day-to-day transactions and functioning of society. Vass Bednar (also interviewed in the above CBC newsclip) summarized the situation in an op-ed in the Globe and Mail as follows:
“Enormous advances in mobile tech have made Canada's telecoms enormously powerful, and that power has consolidated in just five major players. That number threatens to get smaller, too, with the proposed Rogers-Shaw merger currently under review by Canada's Competition Bureau. If the deal goes through, the company that caused so many Canadians to lose connection with each other would serve roughly 40 per cent of all households in English Canada… it reinforced the idea that our telecommunication networks are vital public infrastructure that is controlled by private corporations. We've lost sight of that balance, despite the ways we rely on those networks.”
As discussed in the first takeaway, the issue of redundancy is paramount when it comes to ensuring ongoing access. Ironically, the lack of sufficient alternatives in the mobile carrier space amplifies the availability risk for us all.
Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist that is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else.
