December 2016 Unimutual Update
January 4, 2017
CSIRO Report Highlighting Australia’s Digital Future – Issue 40
January 13, 2017

The Emerging Risk of Fake News

By Harry Rosenthal

Risk professionals, like most professionals, deal in truth. While this may be self-evident, an important contribution the risk professional makes to their university is their role in helping the institution understand the difference between perceived risks and actual risks.  This difference is important when working in a world of constrained financial resources.  For example, while terror related risks are high profile in the media, university risk professionals know that such instances are extremely rare on campus, and that it would be unwise to divert substantial resources away from general campus safety to focus on this risk alone.  Our role is to constantly scan the external environment to help our institutions’ understand which risks are most significant, therefore, deserving of our limited financial resources. We also help them understand which risks should be allocated fewer resources, in spite of popular perceptions.

To do this for emerging and strategic risks, we rely heavily on others to give us a view of the changing external environment.   For example, on campus, we can easily walk around speak with staff, students and contractors, allowing us to physically see what events are unfolding on campus. Externally we rely on different networks, often including social media and news services to develop a view of the changing external risk profile.  It is clear, however, that social media is rapidly replacing conventional news as the main source of external information. The average Australian subscribes to 5 social media-type accounts, such as Facebook, LinkedIn, Twitter, etc. and for many of us, this has become our major source of news.  This can be risky, here are three reasons why:

  1. We saw in the last American election that in social media outlets, fake news substantially outperformed conventional news. In other words, fake news was far more popular than genuine news. While this probably did not affect the US election outcome, it is clear that fake news is successfully growing and should not be relied upon when we conduct our environmental scanning.  It appears that the algorithms of social media platforms (Google, Facebook, etc.), are biased toward delivering fake news to us over real news, and with no human intervention, could spread a false perception of reality.
  1. It appears it is profitable to produce fake news. Again, as a result of investigations following the US election, it was discovered that teenagers, living in Macedonia were the source of some of the most successful examples of fake news regarding the US elections. They did not do this for political reasons, but were aware of how the algorithms  of Facebook and Google award advertising and used this knowledge to create stories which would be widely shared, and therefore attract substantial advertising revenue. While this might be mildly interesting to those with a passion for election intrigue, one Macedonia website,  BVA News,  is actually run by a 16-year old who gets over 1 million hits a month, obtaining large ad revenues. The site features stories about health issues as well as US politics. International fake news is a thriving and highly rewarded business.
  1. While some regard the Internet as useful as some drunk stranger you’ve met in a pub, as a reliable source of information, many of us are growing more dependent on Internet sources for our external view of reality. We saw recently that even mainstream media services carried fake news stories, and as this example illustrates,  there are cases of people believing and responding to the fake news.

There has always been the threat of fake news facing the risk professional, ranging from doctored disaster photos to fake incident reports. Over the years we have learned how to deal with such hoaxes or pranks. Fake news, delivered over trusted networks and driven by computer algorithms, with no human intervention, however, has made this risk far more prevalent. While content providers such as Google and Facebook are taking steps to address this issue, we should be aware that one of our main tools for environmental scanning is currently compromised, and we should factor the level of reliability of information in to our calculations by which we advise our universities.

Dealing with perceived risks has always been a part of what risk professionals do, however, in an age of profit driven fake news, this task has become much more difficult. We need to be sure the emerging risks we detect are the result of genuine occurrences and not a financially or politically inspired fake news event. Eventually we will develop improved skills to separate the fake from the real, but until then, care should be taken when relying too heavily on web based sources of knowledge.

Harry Rosenthal, General Manager, Risk Management Services

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