The cyber risk landscape of tomorrow will look very different to that of today.
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Developments in technology and how these are employed will be the key driver behind the cyber risk landscape in future.
The growing popularity of mobile devices, like smart phones, watches, and glasses, is likely to increase cyber risk.
The “Internet of Things” will see technology become embedded in smart devices around the home, such as domestic appliances, heating or lighting systems and entertainment. Networked technology will also become more commonplace outside the home, from smart cars to wearable devices.
“Predictions suggest that a trillion devices will be connected by 2020, which could lead to a significant increase in cyber vulnerability,” says Rishi Baviskar, Senior Cyber Risk Consultant, AGCS.
The “Internet of Things” will become a much bigger issue for cyber security as more and more devices link to the internet. For example, Chinese students hacked a Tesla Motors electric car, as part of a competition, in 2014, remotely controlling the car’s locks, horn, headlights and skylight while the car was in motion.
It also emerged last year that some 1,000 smart-appliances, including fridges and TVs, were hacked and instructed to send spam-emails as part of a botnet attack.
“This is an area already exercising the minds of underwriters,” explains Nigel Pearson, Global Head of Fidelity, AGCS. “The ‘Internet of Things’ could bring increased potential for physical loss or data breaches.
“Cyber criminals are already migrating to new platforms, such as smart devices, with mobile wallets increasingly being used for financial transactions.
Understandably, there are concerns around potential exposures created, as more sophisticated attacks occur.”
Smart devices are not restricted to consumer goods - factories, supply chains, cities and infrastructure are also likely to look to new technologies.
“Some estimates suggest that as many as 50 billion machines will be exchanging data on a daily basis in the near future”
“Some estimates suggest that as many as 50 billion machines will be exchanging data on a daily basis in the near future,” says Jens Krickhahn, Practice Leader, Cyber & Fidelity at AGCS Financial Lines Central & Eastern Europe.
“IT and technology is becoming increasingly more important. Business and society will face many new exposures currently unknown to us today,” says Krickhahn. As technology evolves, older devices that remain in use could also create vulnerabilities, especially where they rely on outdated operating systems and unsupported software.
“Many firms are already running software that is no longer supported by developers. Now we are seeing that hardware will increasingly become out-of-date and need replacing. Everyone talks of software, but hardware limitations also create vulnerabilities,” adds Baviskar.
The use of outsourced services, like cloud computing and cloud data processing and storage, is another area of concern.
“The problem, for insurers, is that cloud service providers act as data and systems aggregators. So if one of them has an issue, it could result in large business interruption and data breach losses for many companies,” says Pearson.
"Risk managers will need to stay on top of technological trends and anticipate how these will impact their organizations going forward in terms of cyber risk exposure," concludes Paul Schiavone, Regional Head, Financial Lines, North America, AGCS.
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