Cybersecurity and regulation revealed as top risks facing TMT sector

SYDNEY, October 10, 2024 – Cyber and data privacy is the number one risk across the technology, media and telecoms (TMT) sectors, as they become increasingly reliant on innovations such as artificial intelligence (AI) to drive growth, according to the Technology Media and Telecoms risk report 2024 published today by WTW (NASDAQ: WTW), a leading global advisory, broking, and solutions company.

The report, based on a survey of the global TMT industry, also reveals growing concerns about the impact of regulation and trade tensions on future prospects. Some key takeaways include:

• Innovation pressure: A majority (67%) of respondents identified innovation as a strategic priority for the next two years, driven by fears of being left behind by competitors or agile start-ups, while artificial intelligence and machine learning are seen as key opportunities for growth.
• Cyber fears: These trends are driving increased perception of cyber threats. It topped the list of risks to business success in all three sectors, with 51% of media and telecoms businesses (51%) and nearly half of technology firms (46%) identified cybersecurity as one of their biggest risks. Ransomware attacks were the top cyber risk factor, named by 62%.
• Regulation worries: 55% said regulation was the biggest barrier to achieving strategic objectives as governments become increasingly assertive with rules around ownership structures and dominant market positions for critical technology and infrastructure.
• Trade tensions: 74% of respondents said trade disputes were among their greatest geopolitical concerns as firms face increasing restrictions and tariffs related to the disengagement between China and the West.
• Climate and ESG risks: 50% of respondents ranked climate change among their top concerns (54% in media), reflecting the rising concern over new technologies’ carbon footprint. Examples of this include generative AI models such as ChatGPT, which require more power than traditional computing.

Simon Weaver, Head of Asia Pacific and Head of Corporate Risk & Broking Asia Pacific, said “Technological advancements in TMT have a two-sided nature. As new opportunities arise, they inevitably bring new risks. In Asia Pacific (APAC), supply chain disruption was the number one risk for technology firms we surveyed. On the other hand, AI and machine learning present the greatest opportunities for the sector over the next two years, particularly with the region’s focus on innovation and 5G expansion by many of the telecoms companies. For media companies, online advertising and AI seems to be most attractive to companies in APAC.

“As a sector, it is imperative that we evolve in alignment with these developments. Adopting new technologies requires a vigilant approach to potential threats, ensuring that we can adapt safely to the shifting technological landscape. TMT businesses need to navigate this changing landscape carefully and reassess their risks and risk management strategies to meet future challenges.”

Ben Di Marco, Cyber and Technology Risk Specialist, Australia and New Zealand at WTW added, “The TMT sectors in APAC face a complex risk environment driven by rapid technological change, greater AI adoption, increasing litigation risk and emerging regulatory obligations.

“Our findings from the survey highlights that these issues are impacting not only how TMT organisations deliver customer services but also how they manage their wider supply chains, including for companies in Australia. Regulatory risk is one of the biggest obstacles impacting whether TMTs can achieve their strategic objectives. In this environment, even greater pressure is being placed on balance sheet management and, on the need, to implement robust insurance programmes.”

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