As technology becomes more ubiquitous, smart communities will take the time to understand the benefits— and prepare for the risks— of sharing their most valuable assets.
It’s an easy trap for boards to fall into: they find a new technology platform that promises create efficiencies for their community, quickly sign up online zipping through the user agreement, and in a few clicks, integrate the new platform with existing ones by passing their community data through to the new system so they can plug and play as soon as possible without thinking twice.
Adopting new, unvetted technologies is business as usual for many communities, but the reality is that three out of every four ventured-backed companies fail, so a community’s new technology platform is more likely to end in plug and unplug, rather than plug and play. The successful communities of tomorrow will be the ones that understand and plan accordingly.
To understand that, we need to take a look at how we got here.
In 1970, there were only 10,000 community associations in the U.S. In 2016, CAI reports that number reached 342,000 — that’s more than 50% of homeowners living in homeowners associations across the U.S. As the number of associations has grown, the market opportunity has expanded – creating the perfect condition for many tech startups to present exciting, new tools that cater to communities’ needs and our instant gratification culture without being required to provide proof of long-term viability.
Then, if the platform the board has invested in goes under, gets abandoned or gets sold, there’s one loose end that many board members don’t consider: what happens to all the proprietary association data they shared?
All of the information passed through to the platform during setup — addresses, phone numbers, bank account information, and even information about homeowners’ private lives – packages they receive, who lives with them— is now accessible to any number of people or entities. At worst, in the wrong hands, this information could be used for fraud and identity theft; at best, it decreases owners’ sense of privacy.
A board member’s fiduciary duty extends to how technology impacts the community, how data is being used and how it’s protected because every association works with volumes of important data.
In the future, data security must become a critical component of the decisions boards make regarding the startup technologies they’ll implement in their communities. Adopting a more conscious and cautious approach can help mitigate these risks.
What Communities Can Do to Succeed
- Know what you’re agreeing to when you’re presented with user agreements, licensing agreements, and terms of service rather than immediately checking the box.
- Take the time to understand how the company will use your data, store your data, and secure your data, in the event that the company is sold or goes out of business. If the agreements are silent on these points, they’re fair questions to ask the vendor.
- Evaluate any technology vendor based on your potential long-term relationship. Your association doesn’t benefit from working with a company who will be here today and gone tomorrow; rather, it will find the greatest success with a true partner who is committed to helping your community thrive for years to come.
While technology is becoming more ubiquitous in our increasingly digital world, the fact is that some advancements may not align with board members’ obligations to protect their communities and homeowners, and that remains the board’s primary responsibility for boards now and in the future. Before your board adopts any solution, look before you leap.