Companies unprepared for cyber, financial crime and regulatory threats, WEF hears

Journalists covering the 50th World Economic Forum (WEF) annual meeting in Davos, Switzerland. (Reuters)

• FTI Consulting found less than half of all executives surveyed are managing cyber-attacks proactively
• The survey also found that 64 percent of companies experienced a form of financial crime over the past year

LONDON: Global companies remain largely unprepared for events that can impact revenue, valuation and reputation, a survey has found.
The FTI Consulting Resilience Barometer released at the World Economic Forum in Davos interviewed more than 2,200 executives from private and publicly traded companies across all G-20 countries and measured their preparedness against 18 regulatory, operational, cultural, leadership and technological threats.
It found the average resilience score rose from 40 out of 100 in 2019 to 43 out of 100 in 2020.
Five of the countries with the top 10 resilience scores (led by India, with a score of 60) were from emerging markets, while the US, UK, Australia, Germany, France and Japan all saw scores decrease year over year.
“Companies across the G-20 face more complex risks from technology transformation, geopolitical tensions and the polarization of the political landscape,” said Kevin Hewitt, EMEA chairman at FTI Consulting. “The 2020 elections in the United States, the looming UK exit from the EU, cyber-attacks and increasing regulatory actions are just a few examples of challenges we see companies grappling with each day.
“It is not a matter of if a company will face an inflection point or crisis, but when it will happen — meaning the senior executives and businesses that are most prepared are likely to remain the most resilient, competitive and viable.”
Cybersecurity remains a top concern for most organizations and even though cyber-attacks are identified as having the most negative impact on revenue, less than half of all executives surveyed are managing cyber-attacks proactively, and only 10 percent believe they have no cybersecurity gaps at all.
The survey also found that 64 percent of companies experienced a form of financial crime over the past year, with theft and fraud representing 24 percent of financial crimes identified over the past 12 months.
As a result, executives expect to increase their compliance spending by 22 percent in 2020.