Cyber security fears threaten economy’s recovery, say CEOsFeb 15, 2014
Keeping pace with developments in technology is essential to the industry’s recovery, say chief executives in the annual survey by advisers PwC.
They acknowledge that they have to keep pace with the changes going on in the market place, in particular digital changes. Yet three times as many CEOs are convinced that the global economy will improve in the next 12 months as there were a year ago.
PwC’s 17th annual CEO Survey, which includes responses from 133 banking CEOs in 50 countries, found that 56% forecast improvement compared with 19% in 2013.
This buoyant outlook is reflected in the fact that more than half plan to take on more staff over the coming year, with most of those anticipating headcount increases of at least 5%.
David Roper, partner and financial services leader at PwC in Milton Keynes, said: “Industry leaders see technology, including the digital economy, social media, mobile devices, ‘big data’ and other developments, as likely to transform their businesses over the next five years.
"Against this backdrop, most CEO’s see cyber security as one of their biggest risks.
“The organisations that will come through the shake-up in the strongest position to compete will be marked out by leaders who can manage through uncertainty and complexity as they seek to deal with regulatory upheaval while preparing for the future.”
Dozens of financial institutions took part in Waking Shark 2, a simulation of a cyber attack on the sector, organised by the Bank of England in Novermber last year in order to test the institutions’ contingency plans.
Chris Wight, cyber security partner at PwC in Milton Keynes, said: "The recent Waking Shark 2 exercise demonstrated the real progress that the financial services industry and its regulators have made in beginning to pull together a co-ordinated response to the cyber threat.
"With such a dynamic threat, and ever-increasing interconnectedness in the industry, continuing that progress will remain a priority for some time to come.
"All companies should have a clear understanding of the cyber threats they face and the measures they need to take to be confident in their ability to manage risk and become cyber secure."
Over-regulation, slow or negative growth in developed markets, and the response of governments to fiscal deficits and debt burdens pose the greatest challenges to their prospects.
Eight in ten CEOs see their operating costs rising and half believe that their ability to pursue market opportunities and innovate are hampered as a result of regulation.
Mr Roper said: “Banking CEOs are markedly more optimistic about the economy and their prospects for growth than they were this time last year. However, to ensure that their organisations can take advantage of this growth, they can’t afford to fall behind the accelerating pace of change in their market place.”
Other findings from the survey include:
- 86% of banking and capital markets CEOs identify technological advances as the trend that’s set to have the greatest impact on their businesses and two thirds cite demographic shifts as likely to have a transformational impact.
- CEOs see building on their existing market share as the main opportunity for growth, with product and service innovation close behind.
- Limited availability of talent continues to be a concern, with 61% citing it as a threat to growth