UK family firms at risk of cyber-attacks but less prepared to defend themselves
A quarter of British family businesses feel vulnerable to digital disruption but just over half have ever discussed the threat from cyber criminals in the board room, says PwC research.
Digital apathy was greater in the global private sector than the global public sector, with 68% of private company chief executives concerned about the speed of technological change compared to a greater 74% of global public companies. A lowly 41% of private company chief executives were not concerned about cyber threats compared to 65% of global public companies.
The new findings backed up research in the Global Family Office Report last year by Campden Wealth which estimated a significant 40% of all family offices worldwide have experienced a cyber-security breach and consequently lost tens of thousands, even millions of dollars.
An estimated $81.3 billion was lost to cyber-crime in Asia-Pacific in the 12-months to September 2015, according to a survey conducted by professional services network Grant Thornton.
The American Institute of Certified Public Accountants reported 25% of Americans were victims of information security breaches in 2015, double the rate of the prior year.
Even though survey respondents said their biggest single challenge over the next five years was the need to continually innovate, only 54% said they had ever discussed digital disruption at board level. Only half recognised the importance of having a digital strategy globally and 37% of next generations said they struggle to get their business to engage on the subject.
The UK lagged behind international competitors in developing a strategy fit for the digital age at a below-average 49% compared to the global average of 53%, according to the PwC survey.
The Global Family Office Report found 15% of family offices admitted being victims of a cyber-security breach and most hacks resulted in resulted in losses of $50,000 or less. However, one case resulted in the loss of $10 million or more and industry commentators suspected the real number of family offices attacked was far greater.
The Campden Research team confirmed it will investigate digital disruption in family offices again when it prepares its next Global Family Office Report, in partnership with UBS, for release later in 2017.
The shortfall between senior executives realising the growing threat of cyber-crime and taking action to mitigate the risks among British family businesses was spotlighted in the UK Family Business Survey 2017 by PwC.
The eighth family business survey by the professional services network quizzed founders, executives and next-gens from more than 2,800 firms, including 100 from the UK.
Sian Steele (pictured), UK family business leader at PwC, said it was critical family businesses provided training and guidance for both their employees and clients “on how to adopt a digital mind-set and achieve greater levels of digital fluency.”
PwC also interviewed 1,379 chief executives on the threats and opportunities facing them for its 20th Global CEO Survey.
Stephanie Hyde, global entrepreneurial and private business leader at PwC UK, said the fact that private company chief executives were less concerned about technology and cyber compared to their public counterparts was “worrying”, not least because private companies often have fewer resources available to them to invest in new technology and cyber security.
“This may make them more vulnerable to cyberattacks, so in theory they should be more concerned about these threats, not less,” Hyde said.
“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.”
