Why financial professionals say cybersecurity is the toughest risk to manage

A new survey from the The Association of Financial Professionals finds cybersecurity is “the most challenging risk to manage,” a drastic change from 2009 when it was a much smaller concern for financial professionals.

“Well, it’s probably no surprise to anyone that technology can have great benefits but also can have some downside,” The Association of Financial Professionals CEO Jim Kaitz explained on Yahoo Finance’s “The First Trade” this week.

The survey of roughly 365 treasury and financial professionals conducted with Marsh & McLennan shows that 53% of respondents say that cybersecurity is the most challenging risk to manage, compared to just 12% of respondents citing cybersecurity in 2009. The report comes after the World Economic Forum’s own Global Risk Report for 2020 named cyberattacks on the energy, healthcare, and transportation industries as the fifth-biggest risk for the year.

Hacker dark face using laptop in the dark room
Cybersecurity is a growing risk for financial professionals. Image: Getty

“Although organizations are ramping up systems internally, they are tasked with securing a rapidly expanding digital footprint in the face of increasingly sophisticated malicious cyberattacks and an increased number of those committing crimes,” the Association of Financial Professionals survey noted.

Technology does not present the only risk for financial professionals, though. The survey noted that financial professionals were concerned about interest rate cuts and other macroeconomic risks such as pace of GDP, as well as being disrupted by competitors and political uncertainty.

“I think when you look at the whole spectrum of risks that they’re having to deal with, they tend to be risk averse,” Kaitz said. “We actually do another survey that looks at cash and how much cash is on hand, and even through this is obviously a very prosperous time … corporate treasury, corporate finance, they’re still holding a lot of cash. Because there’s so much uncertainty in the world.”

For now, businesses will most likely stay focused on cyber risk, strategic risk (i.e., being disrupted by technology or a small startup), and financial risks more than political risks despite ongoing political uncertainty, according to Kaitz.

“Political risk is something that is, in many cases, beyond their control,” he noted.