Big cybersecurity breaches at Yahoo and Tesco Bank have done little to inspire British CEOs to spend more money and time on their defenses, leaving their companies exposed to an ever-increasing risk of attack.
Their complacency mirrors that of counterparts in the U.S., where various surveys show they appear to be taking a similarly lax approach to protecting their money and customer information.
After surveying 845 of its members, the UK’s Institute of Directors—a key peer group—has found that only 56% had a strategy in place to deal with cyber crime, a proportion unchanged from the previous year. Around 40% didn’t even know who to inform, should they be targeted, and just 44% provided cyber awareness training to staff.
That’s despite the majority of respondents considering IT security to be either quite important or very important to their businesses.
“This report has revealed that business leaders are still putting cyber on the back burner,” said Stephen Martin, the Institute’s director general. “The results, even for small and medium-sized businesses, could be catastrophic.”
The finding comes after a survey performed by Harris Poll on behalf of Nationwide Insurance released in October found that 78% of American small business owners didn’t have a cyber attack response plan, even though 54% were victim to at least one attack. A separate study of business leaders in the U.S., Europe and Asia-Pacific by the Economist Intelligence Unit last year found that 38% of companies still had no incident response plan, despite 77% have suffered a breach in the past two years.
Leaders may be reluctant to invest in cyber defenses, given the cost and sophistication of the technology involved and difficulty sourcing talented individuals with a full grasp of the risks. Even companies with supposedly stringent checks such as Yahoo have been breached—in its case by Russian spies—highlighting the difficulties involved.
The costs of cyber crime can be devastating. Yahoo was forced to take a haircut on its price tag during its sale to Verizon. Tesco Bank in the UK, meanwhile, was forced in November to refund millions of British pounds to customers hit by what the country’s financial regulator described as an “unprecedented” attack.
CEOs may not have much choice but to invest more in defenses as governments around the world introduce new legislation forcing them to do more. Last month, for example, New York state introduced final regulations that require banks and insurers to meet minimum cybersecurity standards and report breaches to regulators.
Britain also is poised to introduce new cybersecurity regulations amid calls from Chancellor Phillip Hammond for CEOs to take more responsibility for protecting their organizations. “With threats evolving all the time, and demanding new regulations just around the corner, we cannot afford another year of complacency from business,” Martin said.
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