Investors grapple with cyber risk
Fund managers understand that cybersecurity is one of the biggest threats to banks. They don’t yet have the tools to properly assess it. But if the data drought were to end, cyber-strategies could become an integral part of their investment decisions
The chief executive of one of Europe’s biggest retail banks, one that has invested heavily in its digital platforms, is outlining what he perceives as the biggest risks to his business. He’s mentioned political risk and conduct risk. Then he pauses, takes a deep breath and tells Euromoney: “But the biggest risk of all is probably a cyberattack.”
So, we suggest, this must now be a regular source of discussion in your regular meetings with investors. “No,” he fires back immediately. “I can’t recall a single institution who has ever asked me about our cybersecurity policies.”
There is a clear disconnect here. The 1,200 risk experts in more than 50 countries that contribute to Allianz’s annual Risk Barometer rank cybersecurity as the third greatest threat facing companies, ahead of natural disasters. It is also ranked as the top future peril. In a report sponsored by Herjavec Group, the global annual cost of cybercrime was predicted to rise from $400 billion in 2015 to $6 trillion by 2021. That is equivalent to the combined GDP of France and Germany.