ACCORDING TO the first-ever edition of the World Security Report, large global companies lost a combined $1 trillion in revenue in 2022 due to physical security incidents. Economic unrest is expected to be the greatest security-impacting hazard in the next 12 months.
The document also finds that companies anticipate a surge in threats and hazards like social unrest, climate change, fraud and theft. As a direct result, physical security budgets are predicted to increase significantly in order to keep people, property and assets safe.
Security leaders intend to focus their investments on advanced technology and providing security professionals with additional skills and training.
Fraud is likely to be the biggest external threat over the coming year. The leaking of sensitive information is predicted to be the biggest internal threat. Dangers posed by hackers, protestors, spies and economic criminals are expected to soar.
Commissioned by Allied Universal and its international business G4S, the World Security Report documents the opinions of 1,775 chief security officers (CSOs) – or those in equivalent positions – from 30 countries. Working for large global companies with a combined annual revenue of more than $20 trillion – a quarter of the world’s gross domestic product – CSO participation was both independent and anonymous.
Benefit of the industry
“We commissioned this report for the benefit of the entire industry and the companies we protect,” explained Steve Jones, Allied Universal’s global chairman and CEO. “It comes at a time when organisations across the globe are increasingly navigating more complex security hazards and threats. The research shows that the impact of security threats on organisations is multidimensional, from the disruption of productivity through to the loss of customers and on again to the potentially staggering financial impact.”
One-in-four companies have reported a drop in their corporate value following an external or internal security incident during the last 12 months.
In addition to CSOs, the report also surveyed 200 global institutional investors to understand the impact of security incidents on the value of publicly traded companies. Investors estimated an average 29% drop in stock price in the wake of a significant internal or external security incident in the last 12 months.
Ashley Almanza, executive chairman of G4S (Allied Universal’s international business) explained: “Global businesses are facing increased security threats. A tight labour market globally and rapidly changing technology that presents new risks and requires different skills are part of the mix. In addition, executive Boards are grappling with balancing physical and cyber security alongside other priorities. The World Security Report helps our entire industry and the wider business community better understand and operate in the challenging, global and fast-moving security landscape.”
*Security threats and incidents
Economic unrest was reported by 47% of interviewees as the greatest security-impacting hazard in the next 12 months (up from 39% in the previous year).
Climate change events are on the rise and the second most concerning hazard, with 38% of respondents suggesting that they may be impacted in the next year. This was followed by social unrest (35%), disruption to energy supplies (33%) and war or political instability (32%).
Leaking of sensitive information is expected to be the biggest internal threat in the next 12 months according to 36% of respondents.
Misuse of company resources or data was the most common internal incident, with 35% of companies having experienced this already over the last 12 months.
Fraud is expected to be the biggest external threat in the next year, as predicted by 25% of CSOs. Fraud and phishing and social engineering were the most common external security incidents experienced in the last 12 months (23%).
The threat from subversives, hackers, protestors or spies and economic criminals is likely to soar, with 50% and 49% of respondents predicting they will be impacted by these groups (both up from 39% in the last year).
Security budgets represented approximately $660 billion (ie 3.3%) of global revenue at respondent companies in 2022.
Physical security budgets are set to significantly increase in the next 12 months.
Artificial intelligence (AI) is top of the agenda for future physical security technology investment, with 42% intending to invest in AI and AI-powered surveillance over the next five years.
*Future of security insights
Cyber threats that threaten physical security systems are challenging to operations according to nine out of every ten respondents.
CSOs reported a ‘disconnect’ between physical security incidents and the importance placed on them at Board level. Nine in ten CSOs stated that company leaders are more concerned about cyber than physical security.
Eight in every ten said the recruitment of security professionals will be a challenging process over the next five years, while nine in ten stated that people skills are more important than the physical attribute of strength when it comes to front line security professionals.