- Increased threat of large scale cyber attacks targeted at critical infrastructure a key global risk for 2018
- The increasingly personalised and assertive style of national leaders makes planning very difficult for businesses
- 2018 will be a year of geo-political fragility that has the potential to trigger shockwaves to global stability and business confidence
Businesses in 2018 will face profound uncertainty because of the increased threat of large scale cyber attacks and the personalised and assertive style of national leaders, warns Control Risks, the specialist global risk consultancy. These are some of the key themes from RiskMap 2018, the annual political and security risk forecast for business leaders and policy makers across the world, published by Control Risks.
CEO at Control Risks, Richard Fenning, comments: “Despite the most positive economic outlook since the end of the financial crisis, we are entering a year of geo-political fragility that has the potential to trigger shockwaves to global stability and business confidence.
“With the threat of the next world order being imposed, not agreed, global dynamics and perceptions of risk are being shaped by a more robust, personalised and unpredictable style of political leadership in many parts of the world, making business planning very difficult. Trying to understand the motivations of global leaders and the potential impact of their actions will be critical to making the right strategic business decisions.”
Digitalisation and the flow of information is a driver of economic growth, but with it brings an increased risk of digital disruption with more powerful and targeted attacks likely in 2018, particularly targeting national and critical infrastructure systems.
Richard Fenning continues: “These global risks, coupled with digitally fuelled populism and governments in Asia Pacific using the internet as a tool of social control, mean businesses are set to face some of the toughest issues the world has faced in a while.”
Control Risks has identified the following as the key risks facing businesses in 2018.
- Large-scale cyber attacks against infrastructure – 2017 was a year of major but random disruptive attacks. 2018 could see the likes of WannaCry, NotPetya and BadRabbit recur, but in a more powerful, targeted and disruptive manner. National infrastructure systems are particularly at risk.
- Personalised leadership – Astride the business risk landscape is a collection of assertive world leaders who rely heavily on nationalism and, to varying degrees, populism. Prone to capricious decision-making, they find foreign companies convenient targets. More than ever, knowing the mind of the person at the top is essential.
- US gets protectionist – Low likelihood, high impact, but the threat is there: in a year of mid-term elections, NAFTA negotiations fail to make enough headway, Donald Trump pulls the US out of NAFTA and the WTO, and goes after China on trade, causing profound disruption to international commerce.
- North Korea escalation – War on the Korean peninsula is unlikely, but while the paths of escalation are clear, deescalation is harder to plot. The search is on for the least bad option. The risks of miscalculation and accidental escalation are the highest they’ve been since North Korean leader Kim Jong-un assumed power.
- Regional rivalries in the Middle East – Ambitious Saudi Arabia and assertive Iran will not go to war, but across the region their rivalry will inform and inflame conflicts and enmities in Syria, Lebanon, Iraq and Yemen and between Israel and the Palestinian Territories.
“There are some clear local implications for these global trends which Australian businesses need to prepare for,” says Cory Davie, Partner and Australia Pacific General Manager of Control Risks.
“Looking at the cyber threat, the Australian government has shown us they are taking it seriously – implementing a
national cyber security strategy as well as coordinating collaboration and communication between companies and
domestic and international agencies. Much of the attention in 2018 will be on the implementation of the new Australian Privacy Amendment Bill, which covers mandatory disclosure data breaches; however, companies will do well to remember this is focused on a symptom and not the threat itself. They need to continue to concentrate on a realistic cyber strategy, which takes into account company culture and employee behaviour, not just their disclosure obligations. Companies need to ensure they have implemented a coordinated cyber security programme across their organisation and that they are constantly reviewing this, because the chance of having your business targeted or impacted is increasing daily”
Further, the global terror threat is becoming a more critical issue in the risk planning for Australian businesses, both at home and abroad, as the threat becomes more diffuse with the collapse of terror strongholds in the Middle East. Cory Davie notes “The Australian government have already pushed the burden of planning for this onto businesses with the Strategy for Protecting Crowded Places from Terrorism, which lays out robust obligations on owners and operators of everything from sports stadiums to movie theatres and pedestrian malls. This goes beyond a facilities responsibility; companies need to understand not just their obligation, but their vulnerabilities to this changing threat landscape.”
The RiskMap 2018 website: The world map with countries’ political and security risk forecasts is available here.
About Control Risks
Control Risks is a specialist global risk consultancy that helps to create secure, compliant and resilient organisations in an age of ever-changing risk. Working across disciplines, technologies and geographies, everything we do is based on our belief that taking risks is essential to our clients’ success. We provide our clients with the insight to focus resources and ensure they are prepared to resolve the issues and crises that occur in any ambitious global organisation. We go beyond problem-solving and provides the insight and intelligence needed to realise opportunities and grow. www.controlrisks.com.
