Cyber crime among top risks

The fear of cyber attacks and IT system failures is increasingly prevalent among companies which are not particularly well prepared to deal with such risks, according to a major global report.

Although traditional risks such as business interruption and supply chain disturbance (46%); and natural disasters (30%) continue to be companies’ biggest concerns, the potential impact of cyber threats is becoming increasingly worrisome for many firms.

Cyber-crime is among the top five risks cited by respondents to the Allianz Risk Barometer. It was 15th two years ago.

After supply chain concerns and natural disasters, fire (27%) and legislative and regulatory changes (18%), the most feared potential issues for businesses followed by cyber-crime and concern over IT system failures.

The potential consequences weighing most on the minds of business leaders arising from cyber attacks are monetary losses, damage to the reputation of the company and business interruption.

The report also finds that although awareness of cyber risks is increasing, many companies are still underestimating their potential impact while budgetary constraints also hamper firms’ ability to counter cyber threats.

“Cyber risks are very complex. Different stakeholders such as IT security architects and business continuity managers need to share their knowledge to identify and evaluate threat scenarios,” said Allianz cyber security analyst, Jens Krickhahn.

“Previously siloed knowledge needs to incorporated in one think tank which can look at risks holistically. The ‘human factor’ should also not be underestimated, as employees can cause IT security incidents inadvertently and deliberately.”

Ulster Bank’s IT failure in the summer of 2012 brought home the potentially stark consequences of such issues when hundreds of thousands of customers were left without banking services for an extended period of time.

In addition to the reputational damage the bank suffered, the economic impact of the failure became apparent late last year when the Central Bank hit Ulster with a record €3.5m fine.