Over a third (34%) of UK retailers view cyber and data threats as the biggest risks to business, with 70% ranking them among the top three risks over the next 12 months, according to new research from Barclays Corporate Banking and Retail Economics.
Retailers depend on various technological solutions to offer customers seamless access to products and services and perform basic operating functions. This makes it a vital issue to address as digital security forms the 'bedrock of resilience', the study noted.
More than half (52%) of UK retailers consider a complex regulatory environment as the second biggest perceived risk, data showed.
This includes friction around international trade and more uncertainty regarding future environmental policies.
Fifty-one percent of respondents also cited financial concerns among the top three risks, reflecting the impact of higher interest rates on financing costs. It has affected retailers, supply chains, as well as businesses involved in financing production.
Retailers feel most confident in managing cyber and data threats despite their concerns, having invested in technology to safeguard their operations.
More than four fifths (81%) feel that they are either 'where they needed to be' or 'ahead' of the competition regarding cyber security issues.
Other Findings
While ‘environmental and social’ concerns ranked as one of the lowest risks over the next 12 months (six out of seven), it is an area retailers feel least confident in mitigating, the study found.
However, retailers ranked this risk as the highest when asked to identify which risks were most likely to rise in the next five years.
Karen Johnson, head of retail and wholesale at Barclays stated, “Part of the solution here is likely to stem from cross-industry partnerships between retailers and corporate organisations for instance in supporting climate tech startups and financing carbon reduction initiatives.”
The top five actions taken by retailers to ensure long-term resilience include investing in technology; enhancing employee training and development; strengthening supply chains; diversifying product offerings; and improving crisis management processes.
GenAI
The study showed the opinion towards GenAI was broadly balanced among retailers, with 41% viewing it more as an opportunity, 37% as a risk, and 23% saying it was too early to tell retailers, or weren’t confident enough to suggest which direction it was likely to take.
Richard Lim, CEO of Retail Economics stated, "The retail industry continues to face successive waves of disruption. In just the last few years, businesses have emerged from a global pandemic to face the worst cost-of-living crisis for a generation, all while technology has evolved at an astonishing pace. GenAI is the new buzzword in the industry, but many are struggling to grapple with what this means for their business and the future."
Lim added, “It’s a huge credit to those who have continued to thrive, and it shows a resilient industry built on solid foundations. However, this should not be taken for granted.
“While retailers may feel prepared to tackle today’s rising threat of cybercrime, they need to remain alert, and seize the many opportunities emerging on the horizon."
