Research shows that organizations are much more concerned about technology risks than other groups of risk
- Published: Tuesday, 14 September 2021 08:02
Specialist insurer Beazley’s new report ‘Spotlight on technology risk’ reveals that a range of technology risks top executives’ risk radars on both sides of the Atlantic. The report is the latest in Beazley’s Risk & Resilience series and looks at how the COVID-19 pandemic has been the biggest catalyst of operational and strategic change in a generation, forcing businesses to adapt their technology infrastructure to new ways of operating. Not only has this led to greater threat of disruption by competitors, it has also opened the door to cybercriminals who have moved fast to exploit staff, processes and networks that were suddenly exposed beyond the corporate firewall. Against this backdrop, the technology group of risks were ranked much higher than any other category of risk by the executives surveyed.
Cyber threat felt most strongly in US
Cyber risks, which include IT-based threats affecting national infrastructure through to individual customer data, data leak or employee error, are the highest ranked within the technology risk category. They are of particular concern in the US where 38 percent of leaders rank cyber risk top vs 29 percent in the UK. Furthermore, in the US 55 percent of businesses feel very prepared to anticipate and respond to cyber risk vs just 34 percent in the UK.
Overall, the sectors which feel most exposed to cyber threats include energy and utilities, with 40 percent of businesses ranking this their top risk, followed by retail and technology media and telecoms (TMT), both with 38 percent of companies ranking this risk top.
Disruption: the fear of keeping pace
Disruption risk, or the failure to innovate and keep pace with new developments, customer demand or market shifts is ranked second in the technology category, with 30 percent of business leaders identifying it as their key risk.
Disruption ranks this highly because UK respondents are particularly concerned by the threat that it poses – with 32 percent ranking it top vs just 28 percent in the US. In terms of the ability to anticipate and respond to disruption risk, well under half (41 percent) of businesses overall reported they felt well prepared.
Investing in tech pays off
Tech risks are defined in the research as not adapting to changing technology developments and opportunities. 26 percent of business leaders in the US and UK ranked this as their top risk.
44 percent of businesses report they feel ‘very prepared’ to manage tech risk. This higher level of resilience is likely to reflect the fact that successful companies have harnessed a combination of astute hiring and investment to ensure they manage this threat appropriately.
The IP blind spot
Intellectual property (IP) risks, the failure to recognise and protect the value of assets such as technological know-how, trademarks, patents or other intangible assets came bottom in the technology risk ranking with only 11 percent of business leaders ranking this a primary concern.
Given that intangible assets are the predominant source of economic value for many businesses, accounting for 75 percent of business value globally, the low-risk ranking assigned to IP is a potential blind spot that may require more forceful remediation, particularly given that only 40 percent of businesses report they feel well prepared to manage it.