Canadian Underwriter

Global private companies seem underprepared for cyberattacks: PwC report

March 20, 2017   by Canadian Underwriter

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Global private companies seem to be more at risk of cyber threats, but less prepared to protect themselves against cyberattacks, according to a new report from professional services firm PwC.

Released late last week, the report, titled Undaunted, but underprepared?, found that only 68% of private company CEOs are concerned about the speed of technological change and 41% of private company CEOs were not concerned about cyber threats. The report is part of PwC’s 20th Global CEO Survey of 1,379 chief executives, which focuses specifically on the threats and opportunities facing the 781 private company CEOs in 79 countries who participated. The countries included the regions of North America, Latin America, Western Europe, Middle East and Africa, Central and Eastern Europe and Asia Pacific.

PwC said in a press release on Thursday that while 74% of public companies polled were worried about accelerating technological change and 65% about cyber threats, private companies, by contrast, registered at 68% and 59%, respectively.

“The fact that private company CEOs are less concerned about technology and cyber compared to their public counterparts is worrying, not least because private companies often have fewer resources available to them to invest in new technology and cybersecurity,” said Stephanie Hyde, global entrepreneurial and private business leader with PwC UK. “This may make them more vulnerable to cyberattacks, so in theory they should be more concerned about these threats, not less. In our view, this is probably the single most worrying finding in our report, especially in light of growing evidence that hackers are now targeting smaller and private businesses, thinking they will not be so well protected.”

PwC also found that 29% of private company CEOs believed that technology had already “completely reshaped” competition in the industry, higher than in publicly listed companies (25%). And as many as 74% of private companies expect their markets to be transformed by technology over the next five years.

Related: Global insurance CEOs concerned about skills shortages and related pace of technological change: PwC survey

With regard to revenue growth, CEOs of private companies were more confident of revenue growth in the next 12 months than their public counterparts: 86% were confident, up 5% from 81% in 2016. “In fact, it’s the first time in five years that private company CEO confidence has been higher than that of public company CEOs,” the release, said adding that 55% of private company CEOs expect to be recruiting more people in the next year, compared to 48% of those heading publicly listed companies.

In contrast, only 30% of private company CEOs believe global growth will increase in the next year, up slightly from 28% in 2015, but down from 37% in 2014, and 43% in 2013. Talent and overregulation retain top spots on the typical private company CEO’s list of concerns, just as innovation tops the list of strategic priorities, the release added.

All CEO respondents to the global survey agreed that the biggest threat to stakeholder trust in their business was the risk of breaches in data privacy and ethics, and this is also the number one concern among private company CEOs, scoring 55%. The score for family firms is much lower, at 45%. “This may suggest either a degree of complacency, or a lack of understanding of the full implications of the costs and risks involved in data breaches,” PwC said.

“We see that private companies are confident and competitive, but there are undoubtedly significant challenges ahead,” Hyde concluded. “They need to digitize, invest in data security, actively look for and hire the right talent for their business, to be able to face these challenges head on.”

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