Companies unprepared for cyber, financial crime and regulatory threats, WEF hears

Companies unprepared for cyber, financial crime and regulatory threats, WEF hears
Journalists covering the 50th World Economic Forum (WEF) annual meeting in Davos, Switzerland. (Reuters)
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Updated 21 January 2020

Companies unprepared for cyber, financial crime and regulatory threats, WEF hears

Companies unprepared for cyber, financial crime and regulatory threats, WEF hears
  • FTI Consulting found less than half of all executives surveyed are managing cyber-attacks proactively
  • The survey also found that 64 percent of companies experienced a form of financial crime over the past year

LONDON: Global companies remain largely unprepared for events that can impact revenue, valuation and reputation, a survey has found.
The FTI Consulting Resilience Barometer released at the World Economic Forum in Davos interviewed more than 2,200 executives from private and publicly traded companies across all G-20 countries and measured their preparedness against 18 regulatory, operational, cultural, leadership and technological threats.
It found the average resilience score rose from 40 out of 100 in 2019 to 43 out of 100 in 2020.
Five of the countries with the top 10 resilience scores (led by India, with a score of 60) were from emerging markets, while the US, UK, Australia, Germany, France and Japan all saw scores decrease year over year.
“Companies across the G-20 face more complex risks from technology transformation, geopolitical tensions and the polarization of the political landscape,” said Kevin Hewitt, EMEA chairman at FTI Consulting. “The 2020 elections in the United States, the looming UK exit from the EU, cyber-attacks and increasing regulatory actions are just a few examples of challenges we see companies grappling with each day.
“It is not a matter of if a company will face an inflection point or crisis, but when it will happen — meaning the senior executives and businesses that are most prepared are likely to remain the most resilient, competitive and viable.”
Cybersecurity remains a top concern for most organizations and even though cyber-attacks are identified as having the most negative impact on revenue, less than half of all executives surveyed are managing cyber-attacks proactively, and only 10 percent believe they have no cybersecurity gaps at all.
The survey also found that 64 percent of companies experienced a form of financial crime over the past year, with theft and fraud representing 24 percent of financial crimes identified over the past 12 months.
As a result, executives expect to increase their compliance spending by 22 percent in 2020.


Remittances from KSA surge as expats help families in lockdown

Updated 23 min ago

Remittances from KSA surge as expats help families in lockdown

Remittances from KSA surge as expats help families in lockdown
  • Foreign workers defy World Bank forecasts by sending home $32.9bn in first 10 months of year, an 18.58% rise on 2019

RIYADH: Expats in Saudi Arabia sent SR123.4 billion ($32.9 billion) in remittances to their home countries in the first 10 months of this year, a rise of 18.58 percent compared with 2019.

The surge in payments came as foreign workers in the Kingdom looked to support their families during the coronavirus pandemic.

The growth is despite forecasts from the World Bank in April estimating that remittances to low- and middle-income countries would decline by 19.6 percent in the Middle East and North Africa (MENA) region this year as workers struggled to cope with the impact of the global health crisis.

Expat workers make up three-quarters of the 13.6 million workers in the Kingdom, with most coming from countries such as Syria, India, Pakistan, Bangladesh, the Philippines, and Sri Lanka.

Figures from the Saudi Central Bank (SAMA) showed that while remittances by expats in the Kingdom rose by 18.58 percent year-on-year between January and October, the biggest spike was in June when the monthly amount surged 60 percent compared with June 2019.

July also witnessed a rise of 32 percent, while August, September, and October saw monthly levels increase 24.7 percent, 28.5 percent, and 19.2 percent, respectively, compared with the equivalent months last year.

Mazen Al-Sudairi, head of research at Riyadh-based financial services company Al Rajhi Capital, told Arab News: “Debt to GDP (gross domestic product) ratio in emerging economies has increased up to 70 percent recently, and the unemployment rate led by COVID-19 has also increased in countries such as India and the Philippines, which are the countries forming the majority of the expat population in the Kingdom.

“Therefore, we believe that increased remittances are due to rising unemployment and difficult economic conditions back in the home countries of expats.”

He said another reason why expats may have been sending more funds home was because their surplus income had increased as a result of being unable to travel or spend as much as normal due to COVID-19 restrictions.

“Once the unemployment risks recede for expats in KSA, as well as in home countries, this level should normalize in our view,” Al-Sudairi added.

While the expats’ remittances increased in the 10-month period, the relative amount sent abroad by Saudi nationals declined by 17.5 percent to $12.58 billion during the same period, compared with $10.38 billion between January and October 2019.

Coronavirus travel restrictions were introduced in the Kingdom in March, leading to a 41.7 percent drop in funds transferred overseas by Saudi nationals in April compared with the same month last year. While domestic travel resumed in late May, funds sent overseas by Saudi nationals still fell 52 percent that month compared with May 2019.

FASTFACT

13.6 million

Expat workers make up three-quarters of the 13.6 million workers in the Kingdom.

Remittances briefly spiked by 17 percent in June, before reducing to declines again for the remainder of the year.

Al-Sudairi said that the drop in Saudis forwarding money out of the country was also due to the pandemic and travel restrictions.

“This affected tourism and medical treatment-related remittances. Even the business-related remittances were impacted in the earlier months of lockdown due to negative confidence.”

He added that he was “expecting the trend to be better next year” once international travel resumed.

The World Bank, despite its pessimistic outline in April, also predicted that remittances would recover in 2021 and rise by 5.6 percent globally and 1.6 percent in the MENA region.

In a statement issued in April, Michal Rutkowski, global director of the World Bank’s social protection and jobs global practice, said: “Effective social protection systems are crucial to safeguarding the poor and vulnerable during this crisis in both developing countries as well as advanced countries.

“In host countries, social protection interventions should also support migrant populations,” he added.