Hiscox: Cyber Resilience’s Role in Powering Business Success

The rise in cyber attacks isn’t just a financial headache for businesses; it’s also a major reputational risk. Customers, partners and investors are more security-conscious than ever, and a single crack in an organisation’s armour can shake their trust and loyalty.

Despite perceptions that cyber security risks are declining, the reality is quite the opposite. According to the Hiscox Cyber Readiness Report 2024, over two-thirds of firms report an increase in the number of times their organisation experienced a cyber attack in the past 12 months, with human error being one of the greatest liabilities particularly, in the age of remote working. 

As these attacks grow in frequency and sophistication, they reveal some serious gaps in businesses’ defences, so leaders must recognise the importance of a strong cyber security strategy for safeguarding their reputation. But it’s not just about protection; a robust approach to cyber security can enhance business innovation and growth too.

The wider costs of cyber attacks

Cyber attacks can have a significant impact on a company’s balance sheet, with many organisations financially unprepared for such events. Over a quarter (26%) of business leaders surveyed said their organisation lacks the sufficient resources to effectively manage the financial risks associated with a cyber security threat. When systems are compromised, organisations often face significant interruptions, leading to delays in operations and a halt in revenue generation. In addition, the financial burden of paying ransoms for data recovery can be costly, with no guarantee that the data will ever be recovered – even after the payment has been made. The longer-term financial impacts of a cyber attack can be equally damaging, with the potential to result in regulatory fines and lead to a loss of business. 

Although cyber attacks can have significant financial consequence, the impact on customer trust and brand reputation can be even more costly. As our research reveals, of the organisations that have experienced a cyber attack in the past 12 months, 47% report greater difficulty in attracting new customers, and 43% report losing customers. 

This issue is a pressing concern for businesses as cyber attacks have become more sophisticated, by targeting sensitive data, making the stakes higher than ever. Organised crime is now going directly after the reputations of businesses and key individuals by leveraging sensitive information and using this to hold organisations to ransom.  Hackers can now threaten the moral and ethical standing of companies by challenging an organisation’s integrity. Who are they doing business with? How are they running their operations? And do their practices truly align with their publicly-voiced values? 

Cybersecurity in the era of AI

As AI becomes integral to business operations, it brings both risks and opportunities in the cyber security space. One major challenge is the rush to adopt AI technologies without implementing robust cyber security measures. This can leave many organisations vulnerable to attacks. Seven in 10 organisations surveyed said they have already integrated generative AI (Gen AI) into their operations. At the same time, over half (56%) of leaders believe this technology will have a significant impact on their cyber security risk profile.

This said, businesses should view tech innovation and cyber security as partners for progress, not rivals. By integrating AI into their cyber security strategies, organisations can enhance their cyber defences with real-time threat detection and automated responses that mitigate attacks before they escalate. Gen AI tools quickly generate reports on threats and vulnerabilities and following an incident, help reconstruct attacks to develop smarter strategies. Embracing AI in cyber security not only protects organisations’ assets and reputations but paves the way for growth and innovation!

Investing in cyber resilience

Being recognised as a secure and trustworthy business offers a significant advantage. Moreover, when considering the main drivers behind their cyber risk management plan, more than a quarter of business leaders (26%) identify the role of cyber risk management in supporting innovation. By integrating cyber security into their innovation strategies, businesses can create an environment that encourages experimentation while safeguarding intellectual property and ensuring regulatory compliance. 

Employees are often the first line of defence against cyber threats, yet they can also be the initial point of entry. To strengthen this line of defence, businesses must cultivate a culture of cyber awareness where cyber security is seen as a team objective. This involves upskilling employees in best practices and ensuring everyone understands the proactive response plans in the event of an attack.

In 2023, 81% of firms allocated up to 10% of their annual revenue to IT, with an average of 11% of this dedicated to cyber security. Looking ahead, two-thirds of firms plan to implement zero trust architecture (ZTA) by 2030. This initiative aims to significantly enhance security through strict verification for accessing sensitive data. However, this transition will require substantial investment in technology upgrades, network infrastructure, and ongoing training for security teams. 

There’s been a year-on-year increase in the adoption of cyber insurance by businesses. This isn’t just bouncing back quickly from breaches; comprehensive cyber insurance gives businesses the confidence to innovate, knowing that they’ve got a safety net in place.

Business leaders should embrace cyber security as a vital part of their overall business strategy to pave the way for a secure and innovative future. Adopting a cyber-resilient mindset not only strengthens business defences but turns potential threats into opportunities for growth.

To read the full story in the magazine click HERE

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