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NZ firms trail behind global counterparts in managing security and privacy risks

NZ firms trail behind global counterparts in managing security and privacy risks

The executive team needs to take ownership of cyber risk and ensure the board understands how the organisation will defend against and respond to cyber risks, according to annual CIO, CSO and PwC information security survey.

New Zealand organisations are trailing behind their global counterparts in managing their security and privacy risks, according to The Global State of Information Security Survey 2015 by PwC, in conjunction with CIO and CSO magazines.

“New Zealand organisations were above average in developing a cyber security strategy, however poorer when it comes to executing it, particularly the supporting elements such as standards, policies, classification of data and tools such as identity management, activity monitoring, risk management tools and encryption," says Adrian van Hest, PwC partner and cyber practice leader.

“So while senior executives in New Zealand organisations seem to be taking cyber security and privacy seriously by assigning ownership and responsibility for this within their organisations, we’re behind other countries in a number of key areas.

For example, when it comes to privacy, the report finds New Zealand is at odds with global practices such as requiring employees to complete training on privacy policy, formally acknowledging compliance and imposing disciplinary measures for violations. Fifty one per cent of global respondents – compared to 38 per cent in New Zealand – have a security awareness and training program.

Globally, 29 per cent of respondents reported having employee records compromised, the figure is 42 per cent for New Zealand.

Fifty four per cent of global respondents have implemented a mobile security strategy – in New Zealand, the figure is 28 per cent.

Local organisations are also lagging behind in using big data analytics to measure the risk and impact related to information security. For instance, 55 per cent of global respondents – compared to 40 per cent in New Zealand – reported increased use of data analytics for this purpose.

Read more: New Zealand firms urged to make information security a priority: IDC

“These risks are exposing organisations to financial, regulatory, brand and productivity impacts and we’re encouraging them to address these. Cyber risks will never be completely eliminated, so organisations must understand that the perpetual and ever changing nature of threat, demands a fairly dynamic and proactive approach,” says van Hest.

These risks are exposing organisations to financial, regulatory, brand and productivity impacts and we’re encouraging them to address these.

Adrian van Hest, PwC

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The report points out cybersecurity is now a persistent business risk. “It is no longer an issue that concerns only information technology and security professionals; the impact has extended to the C-suite and boardroom.” it states.

Effective security awareness requires top-down commitment and communication, a tactic that the survey finds is often lacking across organisations. The report, for instance, finds only 49 per cent of respondents say their organisation has a cross-organisational team that meets regularly to discuss, coordinate and communicate information security issues.

The report notes the C-suite and the board should be directly involved in information security. “It is incumbent upon the executive team to take ownership of cyber risk and ensure the board understands how the organisation will defend against and respond to cyber risks,” it states.

More than 9,700 security, IT, and business executives across the globe – including 85 from New Zealand – participated in the Global State of Information Security Survey 2015.

Read more: Using shadow IT to your advantage

Findings show that the number of detected incidents leapt 48 per cent, to 42.8 million, the equivalent of 117,339 attacks per day in 2013 and this increase comes at great cost with total financial losses attributed to security compromises increasing 34 per cent over 2013. Detected security incidents have increased 66 per cent year-over-year since 2009, the survey data indicates.

“It’s come as no surprise that the rising incidents and associated financial impacts continue to increase,” says van Hest. “The scale of the breaches is much larger and their impact extends to C-suite and the boardroom, with insider incidents and high-profile crimes on the rise.”

Globally, big losses have been more common this year as organisations reporting financial hits in excess of US$20 million nearly doubled. Despite greater levels of concern, the survey found that global information security budgets actually decreased 4 per cent compared with 2013. Security spending as a percentage of IT budget has remained stalled at 4 per cent or less for the past five years.

“New Zealand organisations are bucking this trend however and 67 per cent plan to spend more on their security budgets in the next 12 months. Hopefully this means the increased level of activity in ownership of the issues and a strategic approach is now translating into investment and action.

Read more: Enterprise security decisions reach board level and take priority over other projects

“Organisations will need to identify and invest in cyber security practices that are most relevant to today’s advanced attacks. It’s important that their processes are fully integrated for predictive, preventive, detective and incident-response capabilities to minimise the likelihood and impact of incidents.

Meanwhile, high profile attacks by nation-states, organised crime and competitors are among the least frequent incidents, yet the fastest-growing cyber threats. This year, respondents who reported a cyber-attack by nation-states increased 86 per cent – and those incidents are also most likely under-reported. The survey also found a striking 64 per cent increase in security incidents attributed to competitors, some of whom may be backed by nation-states.

“It is vitally important for companies to focus on rapid detection of security intrusions and to have an effective, timely response. Given our interconnected business ecosystem, it is equally as important to establish policies and processes regarding third parties. Larger organisations need to be particularly wary as they’re more likely to be targets since they offer more valuable information and their size and complexity make attacks less likely to be detected.

“Organisations must change from focusing on prevention and controls for security, to an information-centric and risk-based approach that uses controls to enable the business Information is a powerful business asset and the right approach to security and privacy will empower organisations to maximise its potential,” says van Hest.

Read more: NZ’s primary industries that support the bulk of the economy are least prepared for cybersecurity threats

Read the special report on the New Zealand results of the Global State of Information Security Survey 2015 in the Summer 2014 issue of CIO New Zealand.

Send news tips and comments to divina_paredes@idg.co.nz

Follow Divina Paredes on Twitter: @divinap

Follow CIO New Zealand on Twitter:@cio_nz

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