Over the past year, the cost of IT failures has been hefty when it comes to financial losses as well as in terms of customer confidence and other trust issues, with a new report from KPMG pinning some figures on the matter.
The firm’s Technology Risk Radar tracks major tech incidents suffered in the private and public sectors, and the average cost of an IT failure worked out to be £410,000 over the past 12 months.
Each IT issue KPMG counted affected an average of 776,000 people, and around 4 million bank accounts and credit cards were compromised per incident – some quite eye-watering statistics.
Worse still, the majority of these IT failures – over 50 per cent of them – were triggered by avoidable issues, such as coding errors. Of those avoidable calamities, 7.3 per cent were expressly down to human error.
The report also observed that data loss incidents remain a big problem for businesses across all sectors, and 16 per cent of those were found to be “unintentional”.
Jon Dowie, Partner in KPMG’s Technology Risk practice, commented: “Technology is no longer a function within a business which operates largely in insolation. It is at the heart of everything a company does and, when it goes wrong it affects an organisation’s bottom line, its relationship with customers and its wider reputation.”
“Investment in technology will continue to rise as businesses embrace digital and other opportunities, but this needs to be matched by investments in assessing, managing and monitoring the associated risks. At a time when even our regulators have shown themselves to be vulnerable to technology risk, no one can afford to be complacent.”
KPMG observed how high the cost of IT bungles can be, citing a utility firm that experienced multiple glitches when shifting over to a new billing system – meaning some customers didn’t get bills for months, and when they did, they were full of errors. The company was fined £10 million over the debacle.
KPMG further noted that IT complexity will be the biggest risk to the financial sector over 2015, ahead of ineffective governance, followed by non-compliance with regulations, with cyber-crime coming lower down the list.