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Weekly Media Briefing

This week’s topics: 

  • New research shows cyber security tops UK CEOs’ concerns as hackers scale up attacks

  • What impact does receiving free school meals have on future earning potential?

  • What is the global outlook for mergers and acquisitions in 2022? 

  • How do psychology, ethics and inclusion create the right user experience?

Cyber security risks are the biggest concern for UK CEOs according to new research

Richard Horne, Cyber Security Chair, PwC UK, said:

  • Nearly half (48%) of UK CEOs are extremely or very concerned about cyber risks impacting their business over the next 12 months according to our 25th Annual CEO Survey. This is their biggest worry, coming ahead of concerns about macroeconomic volatility (41%) and health risks (40%).

  • The results of our CEO survey chime with research that our threat intelligence team has conducted. The number of publicly reported ransomware incidents in 2021 was almost double that of 2020 (2,435 in 2021, compared to 1,300 in 2020). And, the number of threat actors conducting ransomware attacks also grew in 2021, despite some high profile disruptions and arrests.

  • During 2021, a number of prominent ransomware attacks caused a significant impact on organisations already dealing with the challenges posed by the Covid pandemic. Criminal groups became more brazen and scaled their operations through ‘ransomware as a service’, in which ransomware developers lease out their malware in exchange for a share of the criminal profits.

  • To overcome this challenge, it is important for organisations to develop ransomware playbooks for executive crisis teams and test these through wargames and exercises. They must also improve their cyber risk modelling and analysis. This will prioritise specific risks and help build long-term resilience.

New data shows impact of receiving free school meals on earnings outcomes 

Data out last week from the Office of National Statistics (ONS) examines, for the first time, the impact of receiving free school meals on the earnings outcomes of 25 year olds across the UK.  

Hollie Crompton, Social Mobility Lead at PwC UK, said:

  • It’s great to see this analysis from the ONS. It’s striking – but unsurprising – to see the stark differences in the earnings of those who received free school meals compared to those who did not. And, as expected, there is also an additional gender disadvantage shown in the data.

  • The findings are concerning, but that’s part of the reason why it’s so important to take the time to do the research. Only by identifying the scale and specificities of the problem can you make informed decisions and take targeted action to drive change.

  • It’s also important for employers to support young people from lower socio-economic backgrounds to develop employability skills, enabling them to be successful in their future careers and ensuring roles are accessible for students from all backgrounds. 

  • I’d encourage employers to consider the role they have to play in tackling this issue by ensuring they are creating opportunities for quality employment and, vitally, creating fair access for all.

Global M&A Trends report - outlook for the UK M&A market in 2022

According to PwC’s latest Global M&A Industry Trends report there will be no immediate slowdown in deals after a record-breaking 2021. PwC UK’s Head of Deals Lucy Stapleton looks at three factors that will play a key role in the UK deals market for the year ahead:

  • Ongoing activism: High levels of public activism around issues such as climate change, inequality and diversity is likely to drive deals as companies seek to divest non-core assets or parts of their business not aligned to their purpose.

  • Hostile takeovers: Our latest CEO Survey shows that business leaders in the US now see the UK as their most favoured growth market, putting the UK ahead of China for the first time. With some UK company valuations beginning to look extremely attractive, that could mean more hostile takeover bids.

  • The National Security and Investment act: The Act, which gives the Government greater powers to intervene and ‘call-in’ when a proposed takeover or merger involves assets of national security or importance, came into force at the start of January this year. It is likely to have a potentially significant impact on a deal’s timetable and certainty, and applies retrospectively to deals that have closed since November 2020.  My feeling is the Act is more likely to cause delays to deals through referrals for ‘in depth’ review and possibly have conditions to help mitigate or remedy the security risk rather than cause deals to fail.

Is the user always right? 

In the latest episode of PwC UK’s A-Z of Tech podcast, Roger Gagnon, PwC’s Chief Experience Officer, and Patrick Glinski, President of Normative, discuss ‘U for UX’, or User Experience.

Roger Gagnon, Chief Experience Officer at PwC UK, said:

  • In this episode, we discover how a multitude of factors including psychology, ethics and inclusion are taken into account when designing the user experience for products, services and experiences. 

  • UX designers have to take a lot more input modes into account than they ever used to. At least when I was growing up, it used to be about clicks, and now it's not just about clicks anymore, it's about touches and taps as well as gestures and voice input. 

  • There are just so many ways that we can interact with the digital world around us, meaning  experience designers and user experience designers in particular, have to be a lot more thoughtful about how a brand's product, service or experiences are delivered. Listen to the episode.

Something to read:

Last year saw the global market cap for crypto assets grow almost threefold yet, even as the market begins to emerge from its niche, it remains an enigma. Just over 30 crypto firms are registered with the Financial Conduct Authority (FCA), with 90% of those who had applied either seeing their application refused or deciding to pull out from the process altogether. In this blog, Laura Talvitie from PwC UK’s Financial Services regulatory team looks at the uncertain future for crypto firms.

Something to listen to:

As many financial services firms move to a long-term remote/hybrid working model, there are a range of issues to navigate, from meeting regulatory expectations to maintaining cultural cohesion. In this episode of the Risk & Regulation Rundown podcast, host Andrew Strange is joined by Sarah Passmore, a Director in PwC UK’s People and Organisation business, and John Newsome, a Director in PwC UK’s Asset Management regulatory practice, to discuss how firms are approaching these challenges and how they can manage the associated risks. 

Something to watch:

This year may prove to be yet another challenging period for retailers with declining consumer sentiment, possible inflation and interest rate rises. But there are also opportunities. On Wednesday 9th February, the PwC UK retail team will host a Twitter Space, where Lisa Hooker, Leader of Consumer Markets at PwC UK, will discuss what retailers can do to win their share of wallet - join the conversation.

About PwC

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Diana Yeboah

Manager, media relations, PwC United Kingdom

Tel: +44 (0)7483 422914

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