How prepared are you, for risks of the future?

Have you thought of the next 10 years and if your models are suitable? More importantly, are you prepared for the next 10 years and the next black swan event?

This unpredictable environment

In setting the scene for the Institute of Risk Management South Africa (IRMSA) Annual conference, themed “Step Up, The Time Is Now”, Thabile Nyaba: IRMSA President stated that, “Organisations are transforming. Models are transforming. Businesses are transforming, etc., The time frame for making decisions is now. As future risk professionals we need to prepare for what is coming up, we have to step up, we need to possess new skills and competencies and a new mindset.”

“We need to be influencers and leaders in our organisations, to survive, thrive and be resilient, because the future of risk management is here. We need to be innovative and do things differently and continuously question our assumptions. We need to step up and be agile and flexible in this unpredictable environment we find ourselves in. We have a huge opportunity to transform ourselves and our organisations to unlock value. We need to step up and be the game changers… step up, the time is now,” she concluded.

The trends in cyber risk 

In terms of cyber risk, Spiros Fatouros, CEO of Marsh Africa said, “there is clear evidence that business leaders have a heightened focus on cyber risk. We are seeing more and more South African businesses being attacked by cyber threats.”

“Cyber risk is a business risk. According to the Global risk report 2021, cybersecurity failures are ranked amongst the highest likely risks over the next ten years,” he said.

“Looking at some global risks, the number of UK organisations purchasing cyber insurance doubled in 2020, driven in part by a greater appreciation of cyber and technology risk, illuminated by changes in work patterns driven by the COVID-19 pandemic. At the same time, pricing generally increased, driven by cyber-attacks and the increase in claims severity,” emphasised Fatouros.

“South Africa has the third most cybercrime victims worldwide, losing R2.2 billion a year. From 2019 to 2020 malware attacks increased by 22% which translated to 577 attempted attacks per hour. The low investment in cyber security and immature cybercrime legislation makes South Africa a target. Ransomware is now on sale on the dark web for as low as $100 (around R1 700), making it accessible even to the most unskilled criminals. The average cost of a data breach is R40 million, and this does not include reputational damage,” added Fatouros.

Trends to keep an eye on

In a recent Marsh Cyber Trends Report, Marsh outlined seven emerging key cyber trends to keep an eye on, expected to continue into 2022 and make a key impact on the cyber risk landscape - these are remote working, ransomware, the Internet of Things (IoT), critical infrastructure, hyper automation, cryptocurrency and increased attacks against managed service providers.

“Understanding the key cyber risks that will impact your business and building preparedness and resiliency around these are key to not just increasing the likelihood of preventing a cyber event from occurring, but minimising the potential economic, operational and/or reputational consequences if one does occur,” he emphasised.

“From an insurance perspective insurers concerns surrounding increasing ransomware and extortion related claims is on the rise. Cyber risk is systematic in nature wherein a single event can adversely affect multiple businesses and territories. The market has entered a challenging cycle,” he added.

Steps towards resilience

The five key steps towards resilience, according to Fatouros, are:

1. Understanding the value of your cyber exposure through cyber risk quantification and considering risk transfer to insurance.
2. Improving basic cyber hygiene by enforcing a security alert culture.
3. Bringing together capabilities of cyber, business continuity and other key stakeholders to ensure responses to attacks are effective. Cyber is an enterprise-wide risk.
4. Integrating risk management and risk transfer decisions.
5. And, operating on the “when” not the “if” principle.

“As risk managers we need to think of all the risks posed in the digital environment. Develop effective resilience and understand your capabilities. Combine traditional techniques with new techniques and prepare for the future. Define risks and scenario plan to come up with a plausible map in this shifting world,” concluded Fatouros.

Writer’s Thoughts
The conference was insightful and packed with key themes and topics that posed many questions and scenarios about the future. More importantly, was the fact that we need to be influencers and leaders in our organisations, to survive, thrive and be resilient. How adequately prepared are you for future events and the risks of the future? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts myra@fanews.co.za