Aon, a global insurance and reinsurance broker, has revealed that cyber attack/data breach ranks first among the top business risks confronting the financial institutions industry.
This insight is derived from Aon’s 2023 Global Risk Management Survey. The survey also identifies regulatory/legislative changes and economic slowdown/slow recovery as the next most critical risks facing financial institutions worldwide, following closely after cyber attack/data breach.
Moreover, the survey indicates that 60% of financial institutions have plans in place to address these risks.
However, only 20% have quantified these risks, and 28% have developed a risk management plan. On average, the industry has experienced a 26% loss of income from the top ten risks.
Sucheng Chang, Head of Hong Kong at Aon, explains, “Issues with cybersecurity and compliance regulations can lead to cascading effects, such as the risk of damage to brand or reputation which ranked ninth and business interruption which ranked tenth. We see leading financial services firms constantly evolving to mitigate these risks, with best-in-class organisations implementing advanced data analytics and capabilities to assess, quantify and manage the risks they face today and those expected in the future.”
Additionally, the failure to attract or retain top talent ranks eighth among the top business risks, with predictions that it will escalate to third place in the future. Shortages in talent and critical skills can hinder innovation and competitiveness, amplifying exposure to various risks, including cyber attacks, regulatory breaches, supply chain issues, and business interruption for financial institutions.
Lee Voon Keong, Head of Talent Solutions in Hong Kong at Aon, emphasises, “The growing interconnectedness of risks in an unstable business environment makes the race to secure skilled talent and upskilling the existing workforce to address these risks more important than ever.”
He adds, “With evolving technologies, coupled with an ageing workforce, the growth of financial institutions in Hong Kong will greatly depend on the ability of organisations to attract top talent with the necessary skills and creativity, in order to remain relevant in a competitive market.”
