(AA) – A new survey published Wednesday found that roughly four-out-of-five investors consider blacklisting businesses that are attacked by hackers.
The report, conducted by consultancy firm KPMG, was compiled from a survey of 133 institutional investors from around the globe. The responding investors manage more than $3 trillion in assets.
“Investors see data breaches as a threat to a company’s material value and feel discouraged in investing in a business that has had its sensitive information compromised,” Malcolm Marshall, the global head of KPMG’s cyber security practice, said in a release.
Digital security has become a growing issue for investors, regulators and the general public in the midst of a series of high profile cyberattacks on companies ranging from Sony Pictures Entertainment to health insurer Anthem. Some appear to be politically motivated and highly sophisticated, like the Sony attack, which has largely been attributed to North Korea. Others, such as the attacks on Anthem and retailer Target, result in the hackers absconding with millions of customer’s personal information.
“Following a number of high profile breaches, we are seeing global investors waking up to the issue of cyber security,” Marshall continued. “The ripple effect of this has seen investor appetite for cyber businesses increase, with the survey revealing that 86 percent of investors see it as a growth area.”
The survey found that the polled investors believed that less than half of the boards of the companies they invest in are adequately prepared for cyberattacks. The investors also believe that 43 percent of board members do not possess the appropriate skills and knowledge to manage risk in the Internet arena.
Essentially, the survey found that the damage to a company’s reputation caused by cyberattacks can be more destructive than the initial hacking. By jolting investors, data breaches can cause long-term pain.