Every business is at risk of a cyber attack and these attacks and data loss are the top risks facing business leaders, with COVID-19 and the forced change in working practices serving to increase concerns.
Cyber risk is a broad concept that encompasses all risks that arise from the use of technology and data, has recently undergone a surge in prominence.
This is in part because of a number of high-profile cyber incidents that have placed the issue of cyber risk to the forefront of public attention.
Cyber attacks should be the number one concern for Board Directors according to new research from McGill and Partners, the specialist re-insurance broker. 81% of board directors surveyed by McGill and Partners and NEDonBoard, the professional body for non-executive directors and board members, identified cyber attacks as the biggest threat that their business currently faces.
The number of large-scale cyber attacks has grown in recent years, with several high-profile examples making headlines across the world just this year, from the Colonial Pipeline ransomware attack in May 2021 to the T-Mobile data breach in August.
Despite an apparent lack of board-level input, it is undeniable that cyber risk affects practically every business. According to a survey commissioned by the British government, nearly nine out of ten large organisations have suffered some form of cyber security breach. The cost of a major cyber incident is likely to be significant. For example, studies have shown that the estimated average cost of a data breach in the UK financial services sector is in excess of $4 million.
In addition, the global shift towards a digital economy means that cyber security and the protection of personal data are subject to increased legal and regulatory scrutiny.
Cost is not the only factor that Board Directors must consider in regard to cyber attacks. On average it can take between two to four weeks to recover from an attack, with some businesses taking much longer to return to normal. This can have a significant financial and reputational impact for businesses unable to trade during these periods.
With more businesses embracing hybrid working, as well as an increasing amount of technology used across all sectors from manufacturing to healthcare the risk associated with a cyber attack is only growing.
There are measures that boards can employ to protect against an attack.
- Cyber insurance can play a role, supporting businesses in the face of a threat as well as protecting the balance sheet. Well-crafted coverage, uniquely suited to the organisation can provide access to fully vetted, post-incident vendors aiding in the efficiency of the response.
- Furthermore they should encourage the adoption of market-leading cyber security protections as a means to broader coverage and support board members in evidencing the organisation’s commitment to cyber security following an incident.
- The impact of a ransomware attack on an organisation can be devastating.Business leaders and board members must be proactive to make sure that their organisation is prepared for such a ransomware attack.
- Every organisation should establish a plan to mitigate the risk of key people being unavailable in the event of a system failure. Keep a list of contact details for backup technicians. Document the configuration of hardware and software applications and keep this up to date so that a new technician can quickly rebuild the system.
While prevention is always the first priority, business leaders and board members should think hard about the processes and procedures they have in place are good enough to ensure the business’ resilience when an attack takes place.
Source: Cyber Security Intelligence