The threat of cyber attacks is now seen as the number one business risk that keeps investors awake at night. That’s the conclusion reached from a PWC report that compared and contrasted the views of investors and analysts with those of business leaders.
Cybersecurity is something that has taken on increasing significance among investors at every level over recent years, from private individuals contemplating Wealthify ISAs online to city slickers undertaking multi million pound trades. Still, the fact that cyber security has risen from fifth to first in a little more than a year has caused more than a few raised eyebrows.
Improving trust
The PWC study found that 41 percent of investors and analysts are “extremely concerned” about cyber threats and regard it as the single largest risk to business. Business leaders, on the other hand, ranked over-regulation and terrorism as higher risks, although around 40 percent had cyber threats in the top three.
Almost two thirds of investors believe that businesses need to improve trust with consumers by making investment in cyber security protection a priority. The other factors that made the top five threats to growth in terms of an “extremely concerned” rating were geopolitical uncertainty (39 percent), rate of technological change (37 percent), populism (33 percent) and protectionism (32 percent).
A different perspective
Hilary Eastman is the Head of Investor Engagement at PwC. She commented on the different perspectives and priorities of investors compared with business leaders as follows: “The top concerns of investors and CEOs emphasise the different internal and external perspectives on, and day to day experiences of, businesses. While on-the-ground challenges such as finding the right skills are high on business leaders’ agendas, investors are preoccupied with the impact that wider societal trends, such as geopolitical uncertainty, populism and protectionism, have on businesses generally.”
That is not to say that investors and CEOs approach every business topic from different angles. PwC found that that both categories are more confident about the overall growth outlook than they were 12 months earlier. 54 percent of investors and 57 percent of CEOs believe global economic growth is going to improve over the coming months. That compares to 45 percent and 38 percent respectively in 2017.
Revenue growth
While there is optimism on the macro level, the view of investors when it comes to their own investments is more pessimistic than that of business leaders. 42 percent of CEOs said they are “very confident” about of business growth over the coming year, compared with just 23 percent of investors.
This disparity can be explained, at least in part, by differing attitudes towards disruptive technology. 85 percent of investors see this as a threat to growth, compared to 64 percent of CEOs.
Eastman remarked: “Investors expect disruption to have a bigger impact on business than CEOs, which might be affecting investor confidence in growth over the longer term. Effective communication between businesses and investors is key to addressing caution. If businesses can clearly demonstrate the actions they’re taking to combat investors’ concerns, they’re more likely to be able to attract long term investment.”
