Risk of cyber attack underestmated by countries WEF warns

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Most of the world’s economies are underestimating the potential risk of cyber attacks on businesses and their economies- the World Economic Forum (WEF) warns.

Most of the world’s economies are underestimating the potential risk of cyber attacks on businesses and their economies WEF warnsA major study by the WEF reveals that, with the exception of the US, most countries have underplayed the risks of cyber attacks on their economic well being.

The warning comes as business leaders, politicians, and academic and non-government organisations prepare for the Davos summit on 20-23 January 2016 to discuss the “fourth industrial revolution” and the global impact of new technologies.

Businesses of all sizes have been affected by complex cyber attacks, and have suffered economic, legal and reputational damage, the WEF’s Global Risks Report 2016 revealed.

Studies show that cyber crime cost the global economy £445 billion in 2014. The costs will be much higher if economic espionage and state sponsored hacking are taken into account.

However, only eight economies have concluded that cyber attack is a risk of the highest concern: Estonia, Germany, Japan, Malaysia, the Netherlands, Singapore, Switzerland and the US.

The findings reveal a lack of appreciation of the effect of cyber crime in the rest of the world, said John Drzik, chairman of the Global Risk Centre at Marsh & McLennan, and one of the contributors to the risk report.

According to Drzik, US companies are more aware of cyber risks because legal requirements to report security breaches have focused the minds of company leaders. As a result, 90% of the world’s cyber insurance is taken out in the US.

“I think there is going to be similar regulation outside the US and that is going to trigger the growth of the insurance market and bring more attention in the corporate sphere,” he said.

The report warns that the threat of sophisticated government sponsored espionage exceeds the ability of companies to defend themselves.

Over the past year, the number and impact of cyber attacks has increased. Hackers are turning their attention to industrial control systems, placing power plants, transportation and other infrastructure at risk.

“There was the recent cyber attack in the Ukraine on a power plant and an industrial control system. There were earlier attacks in Germany on manufacturing systems and there are unreported attacks as well,” he said.

Although terrorist groups have not yet resorted to cyber warfare, this may change in the future. “You have certainly seen organised crime – a different form of terrorism – participating in this sphere,” said Drzik.

Hacking attacks, which have led to loss of confidential information, have cost companies millions of dollars – but companies have lost far more through damage to their reputation.

“If your customer base starts to worry about you being unreliable and being unable to protect confidential data, they may go to a different company – the reputational amplifier can be enormous,” said Drzik.

Some companies have invested in sophisticated technology to monitor and detect security breaches. However, said Drzik, companies realise they cannot prevent every attack and will spend more resources to mitigate and managing the effects of an attack.

“We are not only in a cyber arms race between countries, but between the security community and the hackers. If you are on the defence, you are trying to get ahead of the offence, but it’s going to go back and forth and it’s not going to go away,” said Drzik.

Cybercrime and cyber security tops business worries for 2016

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Cybercrime and cyber security tops business worries for 2016.

Cybercrime and Cyber security tops business worries for 2016This year, cybersecurity will be the main issue worrying global business, firms say, and it will become more critically important as the internet of things takes off and our world becomes ever more mobile and connected.

Lawyers, accountants, digital agencies, research analysts, telecoms and tech firms all gave the BBC’s Technology of Business their views on what the key tech trends were likely to be in 2016.

Here’s a summary of the Top 10 tech trends affecting business in 2016 that emerged:

  1. Cybercrime and a renewed emphasis on cybersecurity
  2. The internet of things and the development of the hyper connected world
  3. Real time data analytics, not intuition, driving business decisions
  4. New data protection laws forcing firms to rethink compliance strategies
  5. Artificial intelligence and robotics replacing repetitive tasks
  6. Smartphones becoming the primary tool for almost everything
  7. More business applications for virtual and augmented reality tech
  8. Increased personalised and in-store location-based marketing
  9. Drones to be allowed to make deliveries and perform other public tasks
  10. Established businesses to face increased competition from start-ups

Allowing customers’ data to be stolen by hackers is not good for business, firms are finally realising. It damages corporate reputations and erodes the public’s “comfort with sharing their data”, says Rashmi Knowles of cybersecurity company RSA.

But the worrying news is that breaches are inevitable, warns Geoff Smith of Experis, while a shortage of skilled cybersecurity professionals is likely to push up the costs of beefing up defences and dealing with attacks.

On top of this, new European data protection laws coming into effect in 2018 will see a “dramatic increase in fines” for data breaches, says James Mullock of law firm Bird and Bird, forcing firms to reassess their compliance procedures this year. Dedicated Data Protection Officers reporting to the board would be “a sensible measure”, he says.

Ransomware is opening up new income for cybercriminals.

Several security experts are forecasting an increase in ransomware attacks, whereby criminals hack into your system, encrypt your data and then demand a ransom before they decrypt it.

“The ransomware arms race will come to the fore in 2016,” says Hitesh Sheth, chief executive of Vectra Networks. “The threat will take on a new, larger role by concentrating attacks on enterprises, holding critical assets hostage in return for even bigger money.”

Other experts warn that the growth of mobile payments systems will offer new opportunities for hackers, while others think criminals will increasingly target employees, suppliers and contractors as a way of infiltrating corporate systems.

Gadgets and objects wirelessly transmitting sensor data to each other and central computers will accelerate in 2016, many believe, leading to a host of new applications – and a host of new cybersecurity threats.

Internet of Things (IOT) cybersecurity concerns will also loom large in 2016.

This new world of “connected everything”, says Tudor Aw, head of technology sector at consultancy KPMG, “should finally see real momentum in 2016”, from connected cars recording driver behaviour data for insurance purposes, to smart watches and other wearables delivering health data and even initial diagnoses.

And all the data that these connected things generate will be stored, analysed and translated into practical insights using real-time analytics, enabling companies to “move beyond just quickly responding to changing customer needs, to actually anticipating those changes,” says Andy Lawson, managing director at Salesforce UK.

But many warn that greater connectivity means more points of entry for hackers constantly on the look out for weak points in any network.