Cyber attacks are the biggest threat to British businesses in the coming year and one that is set to intensify, it has been claimed.
While terrorist attacks dominate headlines, the threat posed by hacking attacks are the major concern of UK industry, according to Control Risks, and could lead to a shake-up of companies' boardrooms.
Richard Fenning, chief executive London-based organisation, said: “The number of hacking attacks has increased over the past year and the fear is in boardrooms that they are ill-prepared to deal with it.
“This is a generational issue, particularly with public companies, that most of the people who sit round that boardroom table are at a disadvantage in trying to understand it.”
He added that the structure of the largest companies – typically the ones most likely to be targeted – means that they tend to be run be older people who are less able to grasp the details of cyber attacks.
Lisbeth Salander, from the Girl With The Dragoon Tattoo, typifies the youthfulness of hackers
“That’s the ‘weirdness’ of the cyber threat,” said Mr Fenning. “As a general rule, age, experience, grey hair, a bit of guile, are your key attributes when dealing with a threat. These people are not going to panic. All of those qualities are compromised by the fact that people above the age of whatever it may be, say 40, just find it really hard to understand. A conversation with the IT department about their vulnerability will leave most of them scratching their heads quite quickly.”
There is a huge education effort going on in business to try to prepare executives for the threat posed by hackers, said Mr Fenning, and this could drive a change in the composition of companies’ upper ranks.
“People that many may regard as too young to hold down full-time employment will suddenly be talking to boards about how cyber works and in a way that people are able to understand and make decisions about.
“Cyber attacks are a clear and present danger to major British companies and I think we will see much younger people with much greater technical ability sitting on boards as a result.”
The prediction came as Control Risks released its annual Risk Map report predicting threats to business over the coming year. It found that the number of targeted criminal cyber attacks doubled over the past 12 months and politically motived hacking attacks rose by 56pc.
The security consultancy is predicting the most harmful cyber attack techniques in 2016 will be hardware compromises where physical systems’ integrity is damaged, followed by criminally motivated attacks, then “advanced persistant threat campaigns” which are state-led espionage operations. Also high up its risk register are “ransomware” which prevents users from accessing their system or files, often through encryption, to extort victims, and data leaks which make public information with a commercial or reputational value.
While the risks are increasing, Mr Fenning said he believes it is harder for hackers to take down an entire bank network or critical infrastructure system such as the power grid than many people think.
“These are better protected and government is doing some sophisticated work to protect them,” he said. “Cyber attacks tend to be ‘surgical strikes’ where a small piece network is compromised, such as in the TalkTalk attack, and it sounds much worse than it subsequently turns out to be.”
While Control Risks expects the risks of cyber attack to “intensify” over the next five years, Mr Fenning also expects some “ground rules” to be established between countries to try to reduce the danger. China and the US have held talks to limit the “weaponising” of the internet, including protecting critical infrastructure, mobile phone networks and hospitals from attacks.
Terror attacks such as those in Paris create a 'fear of fear', rather than a serious risk to wider industry Photo: Reuters
While physical terrorist attacks have intensified, Mr Fenning said they are not a major challenge to UK business as they are not specifically targeted against companies, and instead create a "fear of fear". He said attacks in Paris were likely driven Islamic State being “boxed in” in Iraq and Syria by better equipped forces, resulting in them targeting other parts of the world.
The other major danger to UK industry is the slowdown in China, according to Control Risks. Beijing failing to manage the country’s transition from double-digit growth to a level of around 6pc would trigger a new global financial crisis that would be as intense as the 2008 crash, sending oil far below the already depressed current levels.
Also on Control Risks’ radar is Saudi Arabia’s attempts to control the international oil market by increasing output to affect more expensive oil production in the West. While this has worked to an extent, effectively ending Arctic exploration, it has also shown unconventional oil’s adaptability, and with Iran re-entering the oil market, Saudi Arabia could be affected by new supplies.