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Treasury report warns UK firms over resilience blind spot

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HM Treasury has warned that cyber resilience is becoming a more material commercial issue for UK businesses as disruption grows more severe, recovery costs rise and many organisations continue to treat resilience spending as a compliance cost rather than a driver of performance.

Its report, The Value of Resilience, examines cyber resilience in financial services and draws on research from organisations including FreedomPay, Accenture, KPMG, Retail Economics and the Association of British Insurers. The report argues that cyber resilience should be viewed as an organisational capability tied to growth, continuity and trust rather than a narrow technical safeguard.

The report says cyber attacks are becoming more severe and more financially damaging. It cites National Cyber Security Centre data showing that highly significant incidents rose 50% year on year in 2024-25, while the Bank of England’s 2026 H1 Systemic Risk Survey found that 82% of UK banks, insurers and asset managers ranked cyber attacks among the top five risks to the financial system, up 10 percentage points from 2024.

Rising costs

HM Treasury says the financial effects of cyber disruption now extend well beyond remediation and system repair. The report points to evidence that companies suffering major cyber incidents underperform the market by around 5% on average for a year or more, while major incidents are associated with an average 9% decline in shareholder value in the year after the event. It says the most significant costs often emerge when an attack disrupts an important business service rather than a contained technical system.

Ransomware is one of the clearest examples in the report. HM Treasury says the share of global financial institutions reporting ransomware attacks rose from 35% in 2021 to 65% in 2024. Mean global recovery costs for financial firms, excluding ransom payments, reached £2.04 million in 2024, up from £1.76 million a year earlier. Its modelling, drawing on KPMG Cyber Risk Insights data, suggests plausible worst-case annual ransomware losses of more than £230 million for mid-sized financial firms and close to £466 million for large firms.

The report also argues that average loss figures can obscure the real shape of risk. It says many firms may face no material ransomware loss in a given year, but a small number of severe events account for a disproportionate share of financial damage. In a broader sample of operational disruption events across sectors, it says most incidents represented between 0.2% and 4.6% of annual turnover, while the most severe cases reached around 16%.

Confidence gap

One of the report’s central findings is a gap between business leaders’ confidence in current resilience and their expectations of future disruption. Research cited from the Retail Economics and FreedomPay Business Resilience Survey 2026, covering 101 UK senior leaders in consumer-facing retail and hospitality businesses with turnover of £6 million or more, found that 81% believed their organisation’s investment in operational resilience was broadly sufficient. Yet 60% expected the frequency of operational disruptions to increase over the next three years.

The same survey found that 64% of senior decision-makers agreed that resilience investment reduces risk but delivers limited additional business benefits. Nearly half said executives do not fully appreciate the value of resilience spending, and 48% believed executives in their industry think too much is already being spent on resilience. HM Treasury says that mindset risks leaving firms underprepared for a more disruptive operating environment.

Chris Kronenthal, President, FreedomPay, said: “HM Treasury’s Value of Resilience report shines a much-needed spotlight on a critical vulnerability in the UK’s consumer economy. While 81% of senior leaders believe their current operational resilience is sufficient, our data reveals a worrying gap between confidence and risk.

60% of business leaders expect operational disruptions to intensify over the next three years with cyber-attacks and geopolitical instability cited among the leading concerns. Yet, 64% still view resilience spending purely as a defensive tax that offers limited commercial value.

There is no guarantee of certainty in today’s business operations, but operational resilience is a vital goal to intentionally move towards – particularly for consumer-facing businesses that carry more risk. At the heart of achieving this in payment systems and consumer technology is shifting from a cost-centre mindset to enable secure, resilient infrastructure that drives customer trust, brand protection, and competitive advantage.”

Growth case

HM Treasury’s report makes a broader case that resilience supports growth as well as protection. It says organisations with stronger resilience capabilities are better placed to recover from disruption, maintain customer trust and continue digital transformation programmes without service failures undermining delivery. Among firms in the highest resilience quartile, it cites Accenture analysis showing that 60% recorded profit gains following a severe shock, compared with 21% among the least resilient. It also says highly resilient companies grew revenues 6 percentage points faster than peers and achieved profit margins 8 percentage points above the median in their industry over a three-year period.

The report also links resilience to preparedness for AI-related threats. It cites Accenture research showing that only 10% of organisations are prepared to defend against AI-augmented cyber threats, while 77% lack essential data and AI security practices. HM Treasury says that weakness affects more than security posture because it can also limit an organisation’s ability to modernise, deploy AI and sustain digital growth with confidence.

Its conclusion is that cyber resilience should be treated less as a narrow cost line within IT budgets and more as part of how organisations manage risk, protect service continuity and support performance in a more volatile operating environment. The report says the organisations with the strongest outcomes tend to combine foundational controls such as patching and vulnerability management with better detection, response and recovery capabilities, reducing both the likelihood that incidents escalate and the scale of losses when they do.



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AI skills now outrank experience for UK jobseekers

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Employment Hero says AI skills are now among the top five attributes UK employers look for in job candidates, ahead of prior experience.

The study points to a shift in hiring expectations, with employers placing more weight on digital competence in entry-level and early-career recruitment.

Nearly two-thirds of UK employers surveyed said AI has changed what they look for when hiring. Work ethic and attitude ranked first at 55%, followed by communication and interpersonal skills at 47%, the ability to learn quickly at 42%, digital literacy at 39% and AI skills at 36%. Prior experience ranked lower at 31%.

The research also suggested AI knowledge is becoming more visible in job specifications. Some 37% of UK workers said entry-level roles now specify AI knowledge, while 23% said they do not feel their own skills are strong enough to compete in a job market shaped by AI.

At the same time, many younger workers remain uneasy about using the technology in their daily work. Half of Gen Z workers said they feel guilty using AI at work, 52% said using AI to do parts of their job feels like cheating, and 42% said they use AI without their employer’s knowledge.

This mix of demand and discomfort is creating what the study described as a generational gap at work. Younger staff appear keen to build AI literacy, but many are doing so without clear guidance from employers on when and how the tools should be used.

According to the survey, 81% of Gen Z workers have taught themselves AI skills through social media. More than half, 58%, said they feel positive about AI becoming a bigger part of their working life, compared with 25% who said they are worried.

Hidden use

The results suggest so-called shadow AI use is already taking hold in workplaces. Four in 10 Gen Z workers said they use AI without their employer’s knowledge, and the same proportion said they often present AI-generated work as their own.

For employers, that raises questions about governance, transparency and training. If staff are using AI tools informally, companies may struggle to understand how widely the technology is being used, what risks it creates and whether employees are receiving enough support to use it responsibly.

Ria Kaur, a university student and jobseeker, described the tension younger workers feel as they enter workplaces where AI is increasingly present but still contested.

“As a Gen Z student experiencing the world of work through internships and placements, I see AI everywhere. But I also find that, in workplace situations, AI can feel like my dirty little secret.

“I think this comes from the stigma around younger generations using AI, which becomes stronger in the workplace because of the frustrating idea that Gen Z are lazy, or that we do not know what real work is. If a young person uses AI at work, it can feel like people assume they are offloading the task or taking the easy way out. In reality, a lot of us are using it responsibly to understand a task, prepare for a conversation or make sense of something new, but I still feel like it has to be kept hidden,” Kaur said.

Hiring shift

The data reflects a broader change in what employers consider evidence of readiness for work. While experience has long been treated as a core requirement, the survey suggests some employers now place more emphasis on a candidate’s ability to adapt to new tools and learn quickly.

That may be especially relevant for graduates and school-leavers entering the labour market as employers rewrite job descriptions to include AI literacy. It also suggests younger applicants may gain an advantage if they can show they know how to use AI tools in a practical and transparent way.

Kevin Fitzgerald, UK managing director at Employment Hero, said the findings show workplace norms are lagging behind behaviour.

“There is a real contradiction emerging for young workers. They are being told that AI skills will be critical to their careers, and many are clearly enthusiastic about building those skills, but they still feel guilty when they actually use the tools. When half of Gen Z feel guilty using AI at work, and more than four in 10 are doing so without their employer’s knowledge, it shows that workplace norms have not yet caught up with employee behaviour.

“AI shouldn’t feel like cheating. It should feel like using any other tool that helps people do their jobs better. But if workers don’t have clear guidance, they’ll continue to learn in the shadows, making it harder for businesses to understand AI’s true impact, manage risk and support skills development. The opportunity is to bring AI into the open, build trust, be transparent and help a generation use it confidently,” Fitzgerald said.

The study drew on responses from 3,290 business leaders and 5,454 workers across Australia, Canada, New Zealand and the UK, including 1,025 UK business leaders and 1,500 UK workers.



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eCapital UK names Mike Harrison South Regional Chief

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SOFIAH NICHOLE SALIVIO

News Editor

eCapital UK has appointed Mike Harrison as Regional Managing Director, South, expanding the lender’s leadership team in Southern England.

Harrison brings more than 20 years of experience in corporate banking, invoice finance and fintech. He has held senior roles at Bank of Scotland and Bank of Ireland, and spent six years at a technology company later sold to private equity investors.

In his new role, he will oversee growth across Southern England and manage relationships with clients and intermediaries. eCapital’s southern footprint includes offices in Reading and Bristol.

The appointment comes as smaller businesses continue to seek alternatives to mainstream bank lending. Invoice finance and asset-based lending providers have positioned themselves as options for companies looking for working capital support outside traditional bank products.

eCapital provides invoice finance, asset-based lending and working capital funding for small and medium-sized businesses. It operates from five regional offices across England, Scotland and Wales.

Its parent, eCapital Corp, also serves businesses in the United States and Canada. In the UK, the group works with companies in sectors including food and beverage, recruitment, human resources, transport and manufacturing.

Market shift

Demand for specialist funding has risen as some businesses struggle to secure lending that fits their needs, creating an opening for non-bank and specialist finance providers seeking a larger share of the SME market.

Mark Finn, UK Group Managing Director at eCapital UK, outlined the group’s view of the market as it announced the appointment.

“I am delighted to welcome Mike to eCapital UK. Having worked with him previously, I have seen first-hand his ability to combine strong commercial acumen with a genuine focus on building long-term relationships with small business owners. Mike brings a unique blend of experience across sales leadership, credit, corporate banking and client management, which makes him exceptionally well suited to this role.

“As traditional banks continue to retrench from SME lending, many ambitious businesses are defaulting to short-term borrowing or loan stacking because they haven’t been shown the alternatives. That’s where eCapital is different. Our regional teams take the time to understand each business, helping clients access funding structures that support growth rather than simply solving today’s cash flow challenge. Mike’s experience will further strengthen that approach across the South.”

Harrison’s background spans both lending and financial technology, a combination many specialist finance firms have sought as they build regional coverage and respond to changing borrower expectations. His experience in invoice finance is likely to be central to eCapital’s push in the South, where competition for SME customers remains strong among banks, independent funders and fintech lenders.

Regional focus

Regional leadership remains a significant part of the company’s UK structure. Its model is centred on relationship managers with local and sector knowledge, reflecting a broader trend among specialist lenders seeking to differentiate themselves through local decision-making and closer ties with introducers.

For intermediaries, appointments at regional managing director level are often closely watched because they can signal where a lender intends to focus origination efforts. Southern England contains a large share of the UK’s SME base, including businesses in logistics, services, professional sectors and manufacturing that regularly use working capital products tied to invoices and receivables.

Harrison described the move as part of a wider expansion phase for the company.

“I am thrilled to be joining eCapital UK at such an exciting stage in the company’s growth journey. eCapital has built a strong reputation for delivering flexible funding solutions and exceptional service. I look forward to working alongside the talented team to further strengthen our relationships with clients and introducers in the South, helping more businesses access the funding they need to seize opportunities and grow with confidence.”



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Ode launches free AI voice service for poem recommendations

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Ode Poetry has launched Ode, a free AI voice service that recommends poems in response to users’ feelings. William Sieghart created the service with Microsoft AI and Gravity Road.

Users speak with an AI voice companion based on Sieghart, founder of National Poetry Day and The Poetry Pharmacy, before receiving a poem selected from a curated library.

Ode is aimed at people seeking comfort, reflection or creativity through conversation rather than search. It draws on the therapeutic approach behind The Poetry Pharmacy, Sieghart’s long-running effort to match poems to particular moods and situations.

Users begin by describing how they feel in a short spoken exchange. The system then recommends a poem and delivers it through pre-recorded readings by actors and cultural figures including Stephen Fry, Harriet Walter, Indira Varma and Dominic West.

The project marks an unusual use of generative AI at a time when most consumer products have focused on productivity, customer service or entertainment. Here, the emphasis is on emotional support through literature, with the technology guiding users to existing creative work rather than generating new poems.

According to the companies involved, the service uses Microsoft AI voice and transcription models to recreate Sieghart’s speaking style and interpret users’ spoken responses. The poems are not synthetic output but existing works, delivered through human performances for the app.

The creators said they had secured permission to use the content and voices. That is likely to matter as technology groups face continued scrutiny over the use of creative material and likenesses in AI products.

Ode grew out of in-person poetry sessions Sieghart held at literary events around the UK. Those sessions later informed his Poetry Pharmacy anthologies, published by Penguin, which popularised the idea that poems can be prescribed for emotional states much like remedies.

Human readings

The emphasis on recorded human readings is central to the product’s design. While the conversational layer relies on AI, the poems are delivered in performers’ voices rather than machine-generated narration, a choice intended to preserve a sense of intimacy and authorship.

Gravity Road, the creative studio behind the build, said it designed the service to extend the reach of those personal poetry consultations to a broader audience. The agency is part of The Brandtech Group and works across advertising, social media and creative technology.

Microsoft AI’s involvement places the project within a growing category of cultural and wellbeing applications for large language and speech models. Technology companies have increasingly pointed to uses in education, health and the arts as they respond to criticism over job displacement, misinformation and copyright disputes.

For Ode Poetry, the launch also represents an effort to widen access to a format that has usually depended on live events, books or institutional partnerships. The social enterprise has worked with NHS trusts and mental health charities, using poetry in public and care settings as a source of respite.

“I’ve spent much of my adult life trying to get poetry out of the poetry corner, because I believe in its power to heal and inspire. This project offers the ability to scale a small idea on a global level, and I am hugely excited by the number of people whose lives might be touched by the simple magic of a poem,” said William Sieghart, creator of The Poetry Pharmacy and Ode at Ode Poetry.

His remarks point to the central commercial and cultural question behind the launch: whether users will accept AI not just as a tool for tasks, but as an intermediary for emotionally resonant experiences rooted in human art.

“Poetry is possibly the world’s oldest voice technology. Ode combines it with the very latest AI to reconnect people with the timeless power of real human voices. While much of the AI conversation currently focuses on what it might replace, Ode shows how it can protect and amplify what makes us human,” said Eaves.

The product also reflects a broader effort by developers to frame AI as assistive rather than autonomous. In this case, the model does not write or perform the poem itself; instead, it listens, interprets and selects from material assembled in advance.

That distinction may help the project avoid some of the backlash seen against AI-generated creative content. By positioning the technology as a conversational front end to a human-curated archive, the creators are making the case for AI as a route into literature rather than a substitute for it.

“We’re proud that Ode uses Microsoft’s AI models, not to replace human connection, but to extend it, making moments of reflection and self-care more accessible in everyday life,” said Back.

The service is available as a web app and centres on a simple proposition articulated elsewhere by Sieghart: “A thought which you had thought special and particular to you is set down by someone else, a person you have never met, someone even who is long dead, and it’s as if a hand has come out and taken yours.”



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