The threat of cyber attacks is giving many investors sleepless nights as they consider how much capital exposure they commit to businesses. A survey conducted by global audit firm, PricewaterhouseCoopers (PwC) found that investors put the threat of cyber attacks as number one and are less confident about growth compared to CEOs.
Cyber attacks are a global threat that is not just impacting the revenue of most companies but also of nations. The news is agog of imminent cyber warfare between Russia and the United Kingdom in retaliation for airstrikes in Syria. The United States has an age-long feud with Russia and North Korea over unsubstantiated cyber attacks.
Many countries and organizations are actively making efforts to beef up their cyber defense because of the potential damage it could cause to their business. For businesses, cyber attacks can affect the bottom line, as well as the business’ standing and consumer trust.
The report titled ‘2018 Global Investment Survey: Anxious optimism in a complex world’ noted that investors think cyber security should be the top priority for building trust with customers.
“One area where there is a trust deficit is in cyber,” the report noted. “Admission comes far later than it should and this does not build trust with the public or stakeholders.”
In 2017, a study by cyber security consultant CGI and Oxford Economics showed cyber attacks wiped off at least $52.4 billion off the value of global shares in “recent years”. The report also noted that investors in a typical FTSE 100 (Financial Times Stock Exchange 100 Index) company would be worse off by an average of 120 million pounds.
How to mitigate threat
To attract investors companies need to put some measures in place. One of the measures includes determining the value of information. This concept can be tricky and require that the organizations have the means to determine the value of such information. It often comes down to valuating data loss, in real, as well as, opportunity costs.
Another way to mitigate threat is to factor when carrying out company-wide audits. The CGI report found that only around 10-20 percent of the major breaches companies suffer is currently made public, hence lost shareholder value across markets could rise by as much as a factor of 10.
