CEOs say unprepared to tackle rising cyber threats

The report by KPMG shows 73 per cent of captains of industries in East Africa are worried

In Summary
  • Businesses have increasingly embraced technology in order to maintain productivity levels.
  • They are however optimistic about general economic growth 

A majority of chief executives are worried over rising cases of cyberattack and its likely impact on their organisations, a new survey shows.

Companies are now confronted with an increasingly tough task of safeguarding their expanded digital space against cyber threats.

While other risks may now feature as top concerns for CEOs, the major concern is increasing worries over corporate cyber-attacks for many CEOs at 73 percent compared to 61 percent in 2021.

A report by advisory and audit firm KPMG shows that 77 percent of organisations’ chief officers see information security as a strategic function and a potential competitive advantage.

This has prompted, three out of four chief executive to resort to protecting their partner ecosystem and supply chain since they are as important as building their own organisation’s cyber defences

“Growing experience of the challenges of cyber security is also giving CEOs a clearer picture of how prepared — or underprepared — they may be,” reads the KPMG 2022 CEO Outlook.

Titled ‘Growth strategies in turbulent times’ the report reveals that more CEOs recognise they’re underprepared for a cyber-attack, with 24 percent admitting so in 2022, compared to 13 percent in 2021, this year, 56 percent say they’re prepared, about level with last year

The move has pushed nearly three-quarters (72 percent) of the firms surveyed to set up a plan in place to deal with a ransomware attack, compared to 65 percent in 2021.

The rapid increase in cyber-attacks, coupled with the increasing difficulty of detecting attacks on time, calls for automation and innovation in dealing with cyber incidents.

Businesses have increasingly embraced technology in order to maintain productivity levels.

Manufacturing, automotive, assembly, and pharmaceutical industries have thus implemented technology aimed at increasing productivity while also ensuring safety.

The report says that the rapid increase in cyber-attacks, coupled with the increasing difficulty of detecting attacks on time, calls for automation and innovation in dealing with cyber incidents.

Alexis George, CEO of AMP, acknowledges that cyber security risk is increasing as companies grow their digital capabilities.

“Cyber security is absolutely one of the biggest risks for our industry as we face the future. We manage our risks well, but like any organisation our data is a target. Privacy breaches and scams are threats, and cyber criminals are increasingly sophisticated, but that is the nature of the digital financial landscape. We must continue to adapt, prepare and respond.”

KPMG says digital transformation has become more expensive in recent years, so more than ever, adding that investment should be prioritised in those areas that help drive growth — and potentially slowed or reconsidered on efforts that may be considered non-critical.

Data from the Kenya National Bureau of Statistics (KNBS), reveal that cybersecurity advisories issued to companies increased by 3,693 percent from 81,727 in 2020 to 3.1 million advisories in 2021.

The increased advisories were attributed to new systems to detect cybercrimes installed.

Over the same period, total cyber threats rose by 142 percent from 139.1 million to 339.1 million.

Out of the cyber threats reported, system vulnerabilities had the highest increment from 114,675 in 2020 to 58 million in 2021.

Reported Botnet/DDOs threats also increased from 4.1 million in 2020 to 92.1 million in 2021

This was attributed to the growing number of cyber threat actors such as hacktivists, state-sponsored groups, organised cybercriminals, and cyber terrorists.

The actors targeted mainly the healthcare systems, utility providers, public infrastructure, insurance firms, schools, government organisations, and financial institutions.

Furthermore, most captains of industry in the region are planning hiring freezes in the short term in preparation for the anticipated growth slowdown.

Although the International Monetary Fund (IMF) has projected Sub-Saharan Africa's economy to remain robust this year, the regional outlook is subject to serious risk from adverse developments in the global economy. 

Top economies in East Africa like Kenya will experience slower economic growth than had been anticipated in 2021. 

“In preparation for the anticipated recession, 25 per cent of East Africa CEOs have frozen hiring and 49 per cent are planning to implement a freeze in the short term. 49 per cent of the CEOs are considering downsizing their employee base in the short-term,” noted the report.

They are more optimistic than their global counterparts with only 28 per cent of the business heads anticipating a recession in the next 12 months.

Over the medium term, however, 84 per cent or eight of every 10 regional CEOs expect their staff headcount to increase in the next three years while 14 per cent expect staff levels to stay the same.

“Traditionally, organisations have opted for staff reduction or freezes during turbulent economic times. While it has short-term benefits, the downside and impact of downsizing are also well known,” the report adds.

Already, tech companies in advanced economies including Twitter, Meta and Apple have effected both hiring freezes and layoffs in anticipation of a global recession in 2023.

Meta for instance cut 11,000 jobs last week while Twitter shed half of its workforce on the backdrop of the platform’s takeover by billionaire Elon Musk.

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