Cyberattacks are the number one risk facing companies today – that’s the word from the bigwigs at one of the world’s largest institutional investors.
Both the chief executive (CEO) and the chief risk officer (CRO) of GIC have spoken out on the critical nature of cybersecurity today, warning that cyberattacks are now inevitable.
According to CRO Chia Tai Tee, cyber attackers’ increased sophistication and patience makes them particularly dangerous, with attacks often happening long after a breach has been made.
“The days in which your strategy is based on preventing cyberattacks is over. Now it’s much more about what do you do if you are attacked,” Chia said in a Financial Times report.
“It’s the same thing they say about terrorists. You don’t have to be right every time, you have to be right once.”
Lim Chow Kiat, the CEO of the Singapore-based state fund said that cyber now outweighs every other risk facing the business.
“My biggest worry is cyber security, how it hits different countries. For other kinds of risk, I feel we are pretty well prepared. Cyber is a hard one,” the CEO said.
Lim cited geopolitical volatility as one of the risks facing the business today. According to the CEO, US-China trade tensions will make it more difficult to generate returns – particularly amid today’s high asset prices and withdrawals of liquidity from financial markets. GIC set up a risk model for a potential trade war more than a year ago.
The CEO described Brexit as a “difficult problem” for both the UK and Europe as well as the wider world.
“It represents in some ways going back [on] all this success, progress we have made on many fronts,” he said.
In terms of its impact on GIC, Lim said Brexit represents a “negative” for some of GIC’s UK real estate investment, but said some other counter conditions have helped balance out the impact. The fund has kept its exposure to the UK flat year-on-year at 6%.
In the face of global volatility, the investor has de-risked its portfolio via a strategy that includes cutting exposure to equities in developed markets – from 27% to 23% year-on-year – and boosting holdings of nominal cash and bonds by 2% to 37%.
Lim said the firm may also reduce investments in companies that are vulnerable to external shocks.