Technology is considered a key swing factor of business success, but whilst businesses are investing heavily in tech their enthusiasm for its potential may be greater than their concern over the risks tech can bring with it.
Despite the fact that over half of multinational businesses are prioritising R&D/tech investment only 18% consider tech a top risk according to our Autumn 2017 Risk and Confidence survey. Whilst technology is an amazing enabler of business, it is vital businesses do not underestimate the interconnectivity between tech and cyber risk and other risks.
A good example of this is the Intel chips security flaws - Meltdown and Spectre - that have recently hit the news. Whilst a hardware risk would fall under a liability claim for the hardware manufacturer, if a system hack occurred because of these hardware issues this could also lead to a cyber claim for businesses using this technology. Furthermore if a working security patch is available but for some reason isn’t applied then a security breach could also lead to potential D&O and E&O exposures, and further broader boardroom risks.
The reliance on technology is increasing, so there are other potential risks that can result from technology and cyber flaws, such as supply chain risk and businesses interruption risks if the hardware and software that runs a business and its supply chain fails. As businesses continue to prioritise R&D/tech investment and rely on it more and more in the running of their business, the potential fallout from hardware or software failing will increase and these risks will only grow.
Nowadays this greater interconnectivity of risk needs to be addressed with a more integrated approach than the previous silo model. It’s encouraging that businesses are starting to address their cyber and technology exposures, with 39% of businesses believing technology will be their most worrying risk in Spring 2018 and 48% believing cyber will be, but the wider ramifications to an organisation that these risks bring need to be considered.
Traditionally technology and cyber risks would be dealt with almost exclusively by an IT department, however the interconnectivity of these risks and the exposures to all business departments means IT now need to work with risk managers and the C-suite to consider wider exposure.
Oliver Richards, Underwriter - Technology and Cyber Risks
These findings come from our Risk and Confidence Survey, for more insights download your copy here www.cnahardy.com/pulse.