Updated: Feb 23
Knowing exactly where we are along the COVID-19 journey is hard to nail down, but the fourth multi-territory PwC COVID Pulse survey has shown a stabilisation of the attitudes of the 867 CFO’s respondents. CFO’s are becoming more comfortable as processes and systems begin to stabilise to the new operating conditions.
Economic conditions across the world have undergone a dramatic contraction. The European Commission recently projected that the EU economy will decrease by 7.5% this year, which is more than 1.5 times that experienced during the GFC. This is leading to significant job losses with the US reporting 20.5 million jobs in April, and an unemployment rate of 14.7%. In Australia we have already lost 594,300 jobs which has pushed unemployment to 6.2%, the highest level since September 2015 . The PwC survey has also reported that 37% of CFO’s are expecting to make further reductions to staffing levels in the next month, which will again push unemployment higher.
Cost containment continues to be a major tool in the CFO toolbox, with 81% saying they will be considering further reductions. Facilities and general capex are the clear target with 83% of respondents ear marking this area for reductions. This may not be all bad however, as many CFO’s also reported a desire to continue remote working for at least a portion of their workforce post-COVID. Last survey we discussed the continued investment in Digital Transformation despite cost cutting in other areas, and that was an opinion that continued in the most recent survey.
Data and cyber security have also been protected from the CFO’s knife, with only 3% of survey respondents indicating they intend to make cuts to spending in this area. Cyber security has been on the C-suites radar for a while, however COVID-19 has seen a significant increase in a range of cyber attacks clearly prompting their continued spending in order to protect their companies. Google has reported over 18 million malware and phishing attacks per day related to the pandemic. Many of these attacks have targeted government accounts, as hackers attempt to obtain information on the outbreak. One email phishing attack attempted to target personal accounts of U.S. government employees with lures offering free burgers from American fast food franchises and COVID-19 messaging.
Another area of cyber attacks has been RDP (Remote Desktop Protocol) brute force attacks. Across the globe there has been a spike of this form of attack, which is often the precursor to a Ransomware attack.
In April there was a 41% increase across the entire internet, in the number of Remote Desktop endpoints. This increase is a direct result of the number of people working remotely from home and needing to use RDP to access their work systems. With this amount of cyber activity, it's easy to see why CFO's have placed a protective ring around cyber security spending.
CFO’s are continuing to navigate the quickly changing environment and guide their organisations through the COVID-19 economic crisis. The last four PwC surveys have seen a settling in CFO attitudes, as processes and procedures have been adjusted and the initial crisis passing. As we begin to see economies restart and workplaces slowly reopen, it will be interesting to see how CFO’s again readjust to the new normal in the next survey, due to be published in early June.
*Cover image Manan Vatsyayana/Getty Images