Regulation, cyber-attacks top list of worries for firms


Cybercrimes have no borders and they are different from conventional crimes. PHOTO | SHUTTERSTOCK

Changes in regulations and cyber incidents have emerged as the biggest concerns for companies in Kenya as they organise their plans and resolutions for the New Year, a new report shows.

The Allianz Risk Barometer 2023, which is an annual business risk ranking compiled by Allianz Group’s corporate insurer Allianz Global Corporate & Specialty (AGCS) together with other Allianz entities, shows company bosses remain most apprehensive over changes in legislation and regulations at 31 percent up from 28 percent last year.

These include trade wars and tariffs, economic sanctions, protectionism as well as Euro-zone disintegration among others.

The second in the rank of risks is cyber incidents which include cybercrime, malware and ransomware which causes system downtimes and data breaches standing at 29 percent up from 25 percent in the just-concluded year.

Other concerns are climate change (27 percent), market developments such as intensified competition, new entrants and market stagnation (27 percent) and theft, fraud and corruption (23 percent).

Business interruption, which includes supply chain disruptions ranked at 21 percent, energy crisis at 17 percent, inflation at 17 percent, emergence of new technologies at 13 percent while the risk of a pandemic outbreak ranked at 13 percent.

The report denoted climate change and energy crisis as new entrants in the list of factors that have been giving business operators jitters over the years.

The survey which was carried out in October and November last year incorporated the views of 2,712 risk management experts based in 94 countries and territories and they included CEOs, risk managers, brokers and insurance experts.

“For the second year in a row, the Allianz Risk Barometer shows that companies are most concerned about mounting cyber risks… At the same time, they see inflation, an impending recession and the energy crisis as immediate threats to their business,” said AGCS chief executive officer Joachim Mueller.

The regulatory framework for businesses in Kenya, especially regarding tax regimes, has been wobbling in recent months in a situation that has seen it emerge as a prime pain point for operators.

Just last week, the Kenya Revenue Authority (KRA) effected changes that allow it to plug into betting platforms to do a real-time computation of taxes in a move that will see the firms pay taxes daily by 1 am.

With regard to cyber incidents, the Communications Authority of Kenya (CA) data shows that during the three months to September last year, threats in Kenya rose 199 percent to 278 million with small firms reporting the highest number of incidents.

The authority has in the past advised users to choose applications and plug-ins carefully as most backdoors hide inside seemingly benign apps and plug-ins.

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Note: The results are not exact but very close to the actual.