Amid a wider range of issues to handle, a majority of board members and senior executives responsible for their organization’s cyber risk management had less than a day in the last year to spend focused on cyber risk issues, the 2019 Marsh Microsoft Global Cyber Risk Perception Survey results have revealed.
This lack of time for senior leaders to focus on cyber risk comes as concern over cyber threats hits an all-time high, and as confidence in an organization’s ability to manage cyber threats has declined.
Strategic cyber risk management remains a challenge
Marsh polled 1,500 business leaders from all over the world and from companies in a wide variety of industry sectors and correlated the results with a related survey conducted in 2017.
According to this year’s survey, nearly 80% of organizations now rank cyber risk as a top-five concern, compared to 62% in 2017. Only 11%, however, expressed a high degree of confidence in their ability to assess cyber threats, prevent cyber-attacks, and respond effectively. This is down from 19% in 2017.
For many organizations, strategic cyber risk management remains a challenge. For example, while nearly two-thirds (65%) of organizations surveyed identified a senior executive or the board as a main owner of cyber risk management, only 17% of c-suite executives and board members said they spent more than a few days in the past year focusing on the issue. 51% spent several hours or less.
Likewise, 88% of respondents identified their information technology and information security functions as primary owners of cyber risk management, yet 30% of IT respondents said they spent only a few days or less over the last year focusing on cyber risk.
The cyber risk associated with new technologies
At the same time, organizations continue to embrace new technologies but are uncertain about the risks they bring. Three-quarters (77%) of respondents said they are adopting or have adopted cloud computing, robotics, or artificial intelligence, yet only 36% say they evaluate cyber risk both before and after adoption; 11% don’t evaluate the risk at all.
“Assessment of new technology cyber risk is closely associated with the trust that organizations have — or lack — in the vendors that supply those technologies,” the report notes.
“One-third of organizations acknowledged they assume that technology vendors have already considered all relevant cyber risks and that further verification is unnecessary.”
40% of respondents say they always perform their own due diligence to verify security claims and built-in protections that vendors make regarding new technologies.
Supply chain risk
Many organizations recognize the potential risks their supply chain partners may pose to their own cyber posture, most don’t fully appreciate the risk in reverse.
In fact, 39 percent of respondents said they thought their supply chain posed a risk to their organization, but only 16 percent said that their organization poses a risk to its supply chain/third parties.
“The largest organizations exhibited the largest dissonance on this topic. Among the smallest firms, 28% stated that they faced high risks from their supply chain, while half of that said they posed risks to it. This gap increased markedly with revenue size, with 61% of companies of $5 billion revenues or more saying they faced high risks from their supply chain and only 19% saying they posed a risk to it,” the survey found.
Companies still relying on tech to manage cyber risk
Companies prefer to invest in technological frontline cyber defenses, while investment in other tools and resources for cyber risk management (e.g., cyber insurance, event response training) presents a small fraction of the technology budget.
“This suggests that many organizations continue to believe they can eliminate or manage their cyber risk primarily through technology, rather than through a comprehensive range of planning, transfer, and response measures,” the report notes.
“Best practice calls not for parity of spending, but an investment strategy that, reflecting an organization’s unique risk profile and appetite, leverages the complementary roles of technology and insurance to deter cyber-attacks where possible and transfer the risk of those that cannot be prevented.”
Cyber risk management practices must change
“We are well into the age of cyber risk awareness, yet too many organizations still struggle with creating a strong cybersecurity culture with appropriate levels for governance, prioritization, management focus, and ownership,” said Kevin Richards, Global Head of Cyber Risk Consulting, Marsh. “This places them at a disadvantage both in building cyber resilience and in confronting the increasing complex cyber landscape.”
“In the era of transformational technology and more interconnected supply chains, the cyber risk management practices and mindsets of yesterday no longer suffice and may actually inhibit innovation,” said Joram Borenstein, General Manager, Cybersecurity Solutions Group at Microsoft. “It is incumbent upon senior leaders to focus on these issues for the welfare of their organizations, their customers, their employees, and beyond.”