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More Global Uncertainty in 2018

Monday 18 December 2017

On a global level, 2018 will bring new risks and uncertainty for businesses.

Control Risks, a specialist global risk consultancy, who released their
Risk World Map for 2018, said that uncertainty and risk will come about because of increased cyber threats and the rise of populist national leaders.

“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,” Control Risks CEO Richard Fenning said.
Fenning also highlighted that digitisation and the flow of information is and will continue to be a driver of economic growth, however this also means being susceptible to digital disruption and targeted cyber-attacks.

Australia and Cyber Threats

Cory Davie, Partner and Australian Pacific General Manager for Control Risks said that there will be implications for Australian businesses.
“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,” Davie said.
Earlier this year, former Australian Securities and Investments Commission (ASIC) chairman, Greg Medcraft suggested that the cyber stack could be the cause of another major financial crisis.
“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.”
Earlier this week the Office of Australian Commissioner announced that they have finalised the Notifying Data Breaches (NDB) resources scheme to assist businesses.
The NDB resources cover:

  • which agencies and organisations have obligations under the scheme, including in instances where multiple parties are affected by an eligible data breach
  • how to identify an eligible data breach
  • exceptions to notification obligations
  • how to notify affected individuals and the Commissioner
  • the role of the OAIC in the scheme
Davie warned that the businesses need to have a coordinated cyber security framework that will be constantly reviewed.  

Control Risks Recommendations

Large-scale cyberattacks 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, de-escalation 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.