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Cyber Rated as Top Three Economic Risk for 2017

Connected devices and the potential for cyber-attacks has featured as one of the top risks for 2017.

While economic inequality, societal polarization and intensifying environmental dangers were identified as some of the top risk trends in the World Economic Forum’s Global Risks Report for 2017, ahead of the meeting in Davos next week, the increase in artificial intelligence, robotics and a lack of governance was ranked as the third greatest risk, particularly with society not keeping pace with technological change.

Margareta Drzeniek Hanouz, head of global competitiveness and risks at the World Economic Forum, acknowledged that ‘the fourth industrial revolution’ of artificial intelligence, robotics and biometrics will require a very different approach to regulation, as they have a faster development time and require more agile governance “than what we currently have in place in order to reap the developments of these technologies.”

The report claimed that while technology provides innovative solutions to today’s risks and challenges, it may also produce additional risks which must be assessed and factored into thinking at business, government and international levels. These potential dangers include mismanagement, design vulnerabilities, accidents, unforeseen occurrences and malicious use that post risks to security and safety of individuals.

It also acknowledged that cyber-attacks, software glitches and even bad weather can all have damaging impacts on this new infrastructure.

Speaking at the press launch of the report in central London, Cecilia Reyes, chief risk officer at the Zurich Insurance Group, said that we need to balance the risk and rewards of technological change, as there are negative impacts.

“Risk management is becoming more and more important and you need a holistic approach in managing the risk at company level, and it has to be at the strategic level and risk strategy needs to be embedded in the business strategy, and because of the complexity you need more complex tools to address the risks and mitigate the risks,” she said.

Focusing on the technology and cyber element, John Drzik, president, global risk and specialties at Marsh, said that the new technologies are providing new avenues of cyber-attack and pointed at the IoT-enabled DDoS attack on Dyn as an example.

“Last year cyber was the number one risk in the executive survey in North America; this year it is the number one risk in many countries,” he said.

“Think about the new technologies – AI and IoT, they are creating a broader attack surface in this context for those who want to steal data or attack industrial controls, so think about IoT and the productivity benefits but there is an opportunity for cyber-attack. In this geo-political context, there could be state-sponsored or company-to-company [attacks] that could be quite significant.”

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