We live in the age of internet. The opportunities it affords us are boundless and the track on which it has put humanity and human progress finds no parallel in history. What it does bring along with those positives, however, is a bunch of new threats and headaches that organisations (and people) especially ones that were born in the 20th century are not equipped for.
What New Age Risks include
To put it simply, New Age Risks include the risks that come along with the advent and rapid progress of technology. As technology has gotten more and more sophisticated, it has opened new avenues for businesses in more ways than one. It has helped organisations expand, reach more people, generate more revenue streams, and most importantly, create more tangible impact than the most optimistic organisations could have imagined hardly two decades ago. Yet, for all its positives, technology also brings considerable risks that often threaten the very core of most of these companies. Between 2015-2017, India was the target of 17% of the cyberattacks, second only to the US, which faced 38% of the attacks.
ICICI Lombard recently dived deep into this issue to try to understand how these New Age Risks are perceived by Indias top business leaders and how evolved (or how elementary) awareness about these risks is. The report, findings of which were unveiled by Bhargav Dasgupta (MD & CEO of ICICI Lombard), Alok Agarwal (Executive Director of ICICI Lombard), and Gopal Balachandran (CFO & CRO of ICICI Lombard) in the presence of Professor Kenneth Rogoff, who is a professor of Economics & Public Policy at Harvard University and was a chief economist at International Monetary Fund (IMF).
Interestingly, the reports findings revealed that about 30% (just less than a third) of the respondents believed cyber risks to be one of the three most crucial risks facing their business. When pressed with a more specific question, 39% of the respondents believed cyber threats to be the most critical new age risk facing businesses. This was just behind data theft, believed by 47% respondents to be the most critical new age threat. It can, however, be argued that data theft itself is one form of a cyber risk, with new age start-ups dealing with data of tens of millions of people being as vulnerable to these as the Fortune 500 companies. All of this being said, most intriguing finding of the study remains: when asked how risks have changed for their respective companies in the last three years, 63% of the respondents answered that cyber risks have increased substantially in the last three years, just behind the 67% that felt the same about data theft.
This statistic, accompanied with the fact that 73% of the respondents maintained that new age risks are being either as important as or more important than the traditional risks, reveals an interesting pattern. Organisations and leaders are growing more and more aware of the ubiquity of the risks facing them and are trying to pay more attention to what these risks could hold for these companies in the near and not so near future.
How do you deal with these risks?
Continuing the discussion of the same study forward, 16% of the respondents felt that the biggest problem associated with these new age risks was the difficulty in identifying the solution. Coupled with the 42% who believe that the source of these risks is hard to identify, it tells us just why new age risks are a cause for worry for organisations. They dont know where these issues come from and they dont understand how these can be solved.
This is where the solutions get interesting. If you dont understand source and solution, would it note be better to trust seasoned insurers to handle these risks? Insurance is a key component of making sure that your company stays secure in case of unforeseen events. If cyber threats are something our organisations are not equipped to solve at the highest levels, insurance companies become not only a quality alternative but also an absolute necessity. While prevention is definitely better than cure and organisations would much rather not find themselves in a situation not requiring an insurance, it is also important to be realistic about the nature and magnitude of threats facing these companies and take steps to best protect themselves if need be.