Most businesses are aware of and prepared for natural disasters, but statistically businesses are more at risk for man-made disasters that are preventable if the appropriate measures are in place.
Based on a 2014 study with inputs provided by a global panel of executives and directors, there are five risks that most businesses are subject to, including regulatory changes and heightened regulatory scrutiny, economic conditions in markets, political uncertainty in leadership, ability to attract and retain top client, and lastly, organic growth through customer acquisition. Shockingly, very few consider IT failure and cybercrime pose a significant threat, despite the increased number of cyber attacks on businesses worldwide in 2014 and at the start of 2015. As more companies rely on the cloud to conduct business and increase connectivity, it is safe to say that businesses will need to be better prepared for IT and cybercrime disasters.
While these man-made risks may not pertain to all industries and may be largely determined by location, it’s important to keep a pulse on each to ensure your business is effectively prepared.
Top Industries at Risk
According to a study done to identify the top industries at risk for man-made disasters, the retail and financial industries are the most prone to man-made disasters. There is a great amount of human interaction and financial information in these industries. The more a business relies on its employees to conduct business, the more they open themselves up to vulnerabilities and security breaches.
Fraud and Economic Crime in Business
Research indicates that 45% of U.S. organizations suffered from some type of fraud in the past two years, eight percent more than the global average. North America is the second most common location for economic crime in the world. In the U.S. alone, 8% of businesses exceeded losses of over five million dollars. The U.S. has been the target of some of the largest cyber attacks in history over the past year, including significant financial losses for Target, eBay and multiple U.S. based financial institutions.
Importance of Regular Risk Assessments
To ensure the success and longevity of your business, it is important to check for fraud regularly. Studies show that 47% of organizations do not perform regular risk assessments and 15% don’t perform risk assessment at all. Regular risk assessments can help identify holes in your organization that are vulnerable to internal and external disasters and provide protection prior to incurring significant financial losses. Do your business, employees and future success a favor and ensure protections are in place so you don’t fall victim to these preventable man-made disasters.
Man-made disasters are only a fraction of disasters or risks that can affect your business. It is imperative to understand the enterprise-wide management for all foreseeable threats; including natural disasters and risk financing. Businesses need to be prepared to tackle the organizational challenges relating to: risk assessment, response, communication and monitoring, regulatory compliance, and crisis management. Crisis activities and planning prior to an actual disaster is essential to an organization’s successful recovery.
– See more at: http://msmonline.bu.edu/is-your-business-ready-for-the-next-man-made-disaster/#sthash.1sumKnKq.dpuf
Source: http://msmonline.bu.edu/is-your-business-ready-for-the-next-man-made-disaster/
