King’s Speech: increased focus on cybersecurity critical in current geopolitical climate
As the King provides an update on the Cyber Security and Resilience Bill in his speech today, Sheila Pancholi, Partner and National Technology Risk Assurance lead at RSM UK, comments: “Further support from government to protect businesses and infrastructure from cyber-attacks is critical, as ongoing conflict in the Middle East and Ukraine increase cyber security risks. New AI tools such as Anthropic’s Claude Mythos have also increased cyber risks considerably for businesses.
“The upcoming Cyber Security and Resilience Bill will bring in fines of up to £17m or 4% of global turnover, with strict 24 and 72-hour reporting requirements, increasing pressure on businesses to tighten up cyber security and reporting procedures. Insurers are already taking note, factoring this new potential impact on revenue into their underwriting decisions. Historically, cyber has often been seen mainly as a ‘cost of prevention question’, but the recent Cyber Security Breaches Survey data demonstrates a clear shift, as cyber incidents are now making a tangible impact on the bottom line for businesses.
“The proportion of companies reporting revenue or share value loss after a breach, while still low, have more than doubled year-on-year. At the same time, reports of reputational damage also climbed. This shift makes a compelling case for treating cyber as a measurable profit and loss exposure that sits alongside other major financial risks and therefore deserves the same structured risk appetite discussions.
“The headline breach cost figures, which are often quoted as reassuringly low, don’t always tell the full story. The average cost is reported as £0, largely because of the sheer number of low-level phishing attempts that never escalate. In reality, the true cost of a significant incident impacts on several fronts including revenue loss from operational downtime, increased costs for incident response and forensics, tightening legal and regulatory liabilities, customer costs, reputational damage, and increasingly, higher insurance premiums at renewal.”