As Facebook became the latest on a growing list of major data breach victims in September 2018, a new report by the World Economic Forum in collaboration with Zurich Insurance (compiled from surveys with executives) showed that cyberattacks are the number one concern for businesses in the U.S. and Canada. The issue ranks ahead of data fraud or theft and extreme weather events.
The “Regional Risks for Doing Business” 2018 report notes that the last year marked a high point for cyberattacks, with the WannaCry ransomware attack affecting 300,000 machines across 150 countries and the NotPetya malware attack causing hundreds of millions of dollars in damages to major corporations like Merck, FedEx and Maersk.
Increasingly common news headlines often highlight the staggering costs of hacks, meaning executives are very much aware of the potential for fraud and thefts to cost them millions. Additionally, corporate reputations are at risk as recent legislation changes in certain regions now require companies to report breaches to the public.
The report notes that 87 percent of businesses in Canada fell victim to a successful breach in 2017. However, businesses aren’t the only ones impacted. Incredibly, 65 percent of the U.S. population has experienced a personal data breach, including during the Equifax breach, costing an estimated $600 million and affecting over 143 million consumers, according to the report.
Extreme weather was the third-highest ranked business risk in the region, a ranking mainly driven by Canadian executives, who also included the failure of climate change mitigation and adaption in their list of top ten risks. Natural disasters have been particularly devastating for the country in recent months as several wildfires and extreme heat caused major human and environmental devastation.
The U.S. is not immune from those risks as the succession of major hurricanes and equally devastating wildfires has shown. Hurricane Harvey violently shocked parts of Texas, leaving $125 billion worth of damages in its wake. Hurricanes Irma and Florence followed suit, causing similar levels of damages to Puerto Rico and the Carolinas respectively, while California faced some of the most intense wildfires in its history.
Executives in Canada and the U.S. have differing priorities and concerns – terrorist attacks and issues of physical security were ranked as the second-highest risk for U.S. businesses, possibly due to a wider sense of insecurity related to gun violence. Weapons of mass destruction (WMDs) was ranked as the fifth-biggest risk for U.S. businesses, though neither terrorism nor WMDs featured in the top ten for Canadian firms.
Fiscal crises and energy price shocks finished off the list of top five North American business risks. The report notes that fiscal crises did not make the top ten of U.S. business risks in last year’s report, but jumped to the fourth-highest risk this year, partly stemming from concerns of fiscal deficits and public debt that have emerged following the U.S. tax cuts of February 2018.
The picture painted by this latest survey of business risks points to a turbulent year for North American businesses, and by all indications these risks will only increase with the improved capabilities of hackers and the intensification of climate change. However, just as the sophistication and tools used by hackers increase and weather patterns intensifies, so does our ability to monitor bad actors, predict threats and protect our businesses. Now more than ever, it is crucial for U.S. and Canadian businesses to take a proactive, rather than reactive, approach to these risks.
For a look at risks in other regions, read these blogs by my colleagues and read the full report.