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4 Andrew Brock, EVP and CIO, Associa 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: you find a new technology platform that promises to create efficiencies for your community, quickly sign up online, zip through the user agreement and in a few clicks, you pass your community data through to the new system to complete setup 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. But how? To understand that, we need to take a look at how we got here. As we mentioned earlier, 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. But, if the company goes under, gets sold or the platform gets abandoned, 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 received or identity of all household occupants, for example — is now accessible to any number of people or entities. At best, this decreases owners' sense of privacy. At worst, in the wrong hands, this information could be used for fraud and identity theft. Associations handle a lot of important data, so a board member's fiduciary duty extends to how this data gets used and how it's protected. In the future, data security must become a critical component of the decisions boards make regarding the technologies they'll implement in their communities. Adopting a more conscious and cautious approach can help mitigate these risks. SECURITY FORECAST There Will Be Many Options, But Just One Choice—Your Fiduciary Duty >> *Harvard Business School

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