"All I want for Christmas is…" hopefully deliverable.
Did you know that recently on Chinese Singles Day (11 November 2020), China’s major online sales platform Alibaba reached a record peak with 583,000 online orders per second? By the end of the day, the company had made more than USD 74bn with the world's largest online shopping event. The US equivalent to Chinese Singles Day is Black Friday followed by Cyber Monday. And similarly, the 2020 “edition” of Black Friday and the following Cyber Monday brought in record revenues of USD 19.8 billion in the USA. Meanwhile, traffic at physical stores was down by 52%. Both analysts and market experts expect a further boost in this year's online Christmas shopping due to the Covid-19 pandemic. Michiel Greeven, EVP Global Sales at DHL Express, recently stated: “From an e-commerce perspective some might say Covid-19 brought 2030 to 2020, with online shopping and the necessary shipping the new normal.
It is not just online Christmas sales and the related distribution that are fully dependent on a functioning IT infrastructure. Nearly all economic relations around the world, global production and logistics increasingly depend on IT services and digital infrastructure. Munich Re is assessing cyber events and outages that can interrupt supply and value chains around the globe. A recent report from McKinsey shows how value chains have grown in length and complexity: Since 2000, the value of intermediate goods traded globally has tripled to more than USD 10trn annually. Nowadays, operating models are based on automation, on time in full (OTIF) deliveries, short lead times, smart production, artificial intelligence deployment, big data analytics, etc., in order to be more efficient.
As a consequence, severe interdependencies and bottlenecks are on the rise and a disruption of this complex supply chain through a cyberattack has today become a major concern in nearly every industry. Therefore it is not a surprise that Munich Re currently sees a growing demand from OEM that enforce their supplier to have cyber insurance in place. Since it is often very hard to achieve transparency, redundancy and resilience in supply chains, cybercriminals seek an advantages by causing (contingent) business interruption within the supply chains.
This is what a cybercriminal's wish list might look like to exploit the cyber-related supply chain risk even further:
- No supply chain risk management. Cyber criminals look for risk owners who do not address information security in supplier relationships and agreements.
- No monitoring or reviews of the supply chain.
- Unprotected and standalone processes. Hackers generally like more bottlenecks and fewer redundancies! This makes supply chain attacks more critical.
If you are a supplier, make sure that your deliverables are delivered – before, at and after Christmas. If you need to safeguard your supply chain, put this as your top priority for risk management. Don’t let cybercriminals interrupt your festive season.
Together with our clients, we’re creating cyber solutions that go far beyond traditional risk transfer.
Have yourself a merry little cyber insurance!