Cyber security is top fear among US CEOs

30 May 2018 5 min. read

American CEOs are more fearful of a cyberattack on their business than their counterparts across the globe, reveals a new KPMG report. US leaders consider themselves guardians of customer data and are also more prepared to lead their organizations through radical digital transformations.

Having interviewed 1,300 leaders across 11 of the world’s largest economies, KPMG has released its 2018 CEO Outlook with interesting findings. US-based leaders are the most likely to be worried about cybersecurity and to view the protection of customer data as a top priority. They are also far more prepared for radical change and likely to trust their instincts over data-driven insights.

Across the 11 economies – which included China, the UK, and Germany in addition to the US – a return to territorialism was cited as the greatest fear of CEOs. Cyber security risk came a close second, followed by disruptive technology, climate change, and operational risk. While on average less than half (49%) of CEOs perceived a cyberattack on their business as ‘inevitable’, the proportion shot up to 68% among US leaders. By contrast just 32% of Chinese and Spanish CEOs were as concerned.

Inevitability of a cyber attack on their business

Head of KPMG Asia Pacific’s Cyber Security practice, Dani Michaux, argues that, in the US at least, “Cyber security has become a mandatory boardroom topic, particularly as governments and regulatory bodies increase their scrutiny,”

“Smart leaders are making cyber-preparedness a board priority, stress-testing the resilience of their systems and people to withstand an attack. Businesses are also looking for a competitive edge from this investment and the increased insight they get on their systems and data,” she added.

Where the concern seeps in regards an organization’s defense capabilities against a cyberattack. Just 51% of respondents said they felt their firm was well-prepared. These percentages varied by industry, with 67% of those in infrastructure believing they were ready for a cyber challenge contrasting with just 41% in the automotive sector.

How well prepared sectors are for a cyber attack

In the US much of the concern about cyber security stems from an evolving appreciation of the value of customer data. As noted by Carmen Bekker, Partner at KMPG’s Customer Brand and Marketing practice, “CEOs recognize that customer data could be their most valuable asset, transforming their ability to personalize products and services.”

“Trust in big institutions is waning, while trust in personal, such as one-to-one recommendations from friends, is increasing. Corporates that recognize and enable the personal, such as protecting an individual’s data and instilling confidence that their data has not been misrepresented, will win customers’ trust,” she added.

Protection of customer data is top priority

This sentiment is felt acutely by US CEOs, 89% of whom consider protection of customer data to be a ‘top personal priority’. Such feelings are not shared in Spain where the proportion is just 32%. Across most of the other advanced economies, CEOs who placed data protection among their top priorities were in the minority.

Another area in which US leaders stood out from the global crowd was in their propensity to follow instinct over data. Almost eight in ten US CEOs (78%) have overridden data-driven insights because they conflict with their personal instincts. By contrast the figure was just 51% in France and 56% in the Netherlands.

CEOs who have overlooked data-driven insights

“CEOs in the US are particularly likely to draw on their domain expertise and unique insights when making critical strategic decisions,” reads the report, “with three-quarters saying they have overlooked computer-driven models in the past and followed their intuition instead.”

Steven Hill, Global Head of Innovation at KPMG International, makes a driving analogy: “There’s a mountain of technical data — brake pressure, angles of steering input — all coming at once. At some point, experience kicks in and, if necessary, overrides all the other signals.” In this respect American business leaders appear more confident than their counterparts abroad, who are more likely to follow the data.

How prepared are CEOs to lead radical change

 This confidence extends to their readiness to take on the defining challenge of digital transformation. An overwhelming 91% of US CEOs said they were personally ready to lead their organization through a radical change of its operating model. Just 47% of Japanese leaders were as brash about change, while British (67%) and Indian (62%) CEOs are not quite as galvanized by digital transformation as US leaders.