Cyber crime and data security are a significantly higher concern for financial services directors compared to companies overall and is impacting their risk appetite, according to the Australian Institute of Company Directors (AICD).
The bi-annual AICD Director Sentiment Index for the first half of 2024 of over 1,000 directors found over half of financial services directors are concerned about cyber crime and data security (57 per cent) compared to 43 per cent of directors overall.
Tying into this, 55 per cent of financial services companies said the threat of a cyber attack is impacting the risk appetite of their board compared to 45 per cent of overall directors.
Comments describing the threat of cyber crime and data security from respondents include the need for extra resources, impact on multiple levels of the business, the speed necessary to keep up with developments and the high costs incurred.
Overall, 90 per cent of directors said they have not experienced a threat such as a hack in the last 12 months, but 43 per cent lack confidence in their organisations having the appropriate governance to manage AI-related risks and opportunities.
AICD managing director and chief executive, Mark Rigotti, said: “Directors are feeling the weight of regulation and uncertainty around non-financial considerations such as cyber security, AI governance and the introduction of the government’s mandatory climate reporting regime.”
Other concerns identified as keeping directors awake at night include legal and regulatory compliance and domestic economic conditions.
Looking at issue that financial services believe the federal government should address in the next three years, the sector worries most about productivity growth. Some 43 per cent of financial services directors are concerned about productivity growth compared to 31 per cent of directors overall.
But positively, 47 per cent of financial services and insurance directors expect business conditions to be strong over the next 12 months. This is second only to the mining sector and compared to lower results of 16 per cent of manufacturing directors and 25 per cent of healthcare directors.
The overall Director Sentiment Index has improved marginally by 0.5 index points but remains negative for the fourth consecutive six-month period. Economic outlook and macro policy conditions have improved slightly, but business conditions and structural policy conditions have decreased, and directorship conditions remain flat.
