Business confidence is spiking in the Asia Pacific region, but risk managers must be on their guard against cyber and technology-related risks
Business confidence in the Asia-Pacific region is expected to rise sharply, with 76 per cent of Asian companies saying they expect to be fully confident by May 2020.
Despite this optimism, business leaders must brace themselves for risky times ahead, particularly given the current political instability in Hong Kong and the ongoing rumblings of a possible trade war between the US and China.
Fortunately, most firms are aware of the threats on the horizon. In fact, according to data from CAN Hardy, 83 per cent of organisations believe 2020 will bring a high or moderately high-risk environment
Unsurprisingly, economic risk is the top concern for most businesses, but there is also anxiety about technological disruption of business models and – closely related to that - cyber risk.
The rapid pace of technological change is one of the biggest concerns for firms. Again this is not surprising.
The IMF has said that in most of Asia, the share of information and communications technology in GDP has increased substantially faster than economic growth. Among the world’s top 10 economies with the largest ICT to GDP ratio, seven are in Asia, including Malaysia, Thailand, and Singapore.
As a result, businesses are embracing new technologies in a bid to stay relevant and find opportunities for growth. CNA Hardy found that 80 per cent of firms say they plan to invest in next-generation technology to improve business efficiency as they enter 2020.
Of course, new opportunities mean new risks, and this is what both business leaders and the risk management community need to plan for and mitigate against.
A CNA Hardy spokesperson said: “In this competitive environment, firms will require a sure touch as they invest in technology upgrades.
“Close partnership with insurers will be essential if businesses are both to reap the reward of their investments, but also to guard against the enhanced cyber risk associated with greater dependence on technology.”