New Zealand businesses are going digital, but many are struggling to cope with the consequences a digital business model is having on their cyber security risk profile.
As a result, many are relying on basic penetration tests, without developing a comprehensive security strategy.
That’s according to recent PwC findings, which tracks the transformation that digital business models are bringing to local companies, and the impact this is having on cyber security efforts.
“It’s heartening to see the change in perceptions among businesses in their approach to cyber security,” PwC New Zealand partner and cyber practice leader, Adrian van Hest, said.
“However, leaders are struggling to fully grasp the breadth of cyber risks their organisations face and the value of the data they are gathering, let alone translating awareness into action.
“Companies that are making this transition to a digital operating model have to make cyber security central to their transformation efforts.”
Compared to the rest of the world, Kiwi businesses are lagging in the amount of spending they are directing towards cyber security.
Van Hest said these efforts are also focused more towards basic measures like penetration tests, at the expense of those that are more likely to address the insider and partner issue, such as comprehensive identity management systems and tighter control over administrator privileges.
The uptake of managed security services, for example, is almost half that of Australia (44 per cent compared to 78 per cent).
At the same time, the origins of cyber attacks are becoming more diverse, with respondents twice as likely to report security breaches that originate from their business partners, compared to last year’s findings (21 per cent compared to 10 per cent in 2016).
“A major concern is the focus on only a narrow range of methods to detect cyber security weaknesses,” van Hest added.
“New Zealand companies are over-reliant on very basic penetration tests, and less focused on understanding their risk, let alone more advanced analytics and how to respond when something actually happens.”
Blurring the lines
The rise of digital businesses, mass adoption of cloud technology and the increasingly complex network of relationships with customers, employees and supply chain partners have all blurred the lines of traditional cyber security.
As a result, New Zealand companies are struggling to respond to the added complexity - only 29 per cent of local firms evaluate the security of third-parties, despite suppliers and business partners being the fastest-growing source for cyber attacks.
Likewise, employees were the single largest source of cyber security breaches, yet organisations are still focusing on external threats.
“Rather than trying to ring-fence their organisation, companies now have to develop a proactive security approach across their entire digital presence,” van Hest added.
“That means holding suppliers accountable for breaches, addressing the risk from employees and treating customer data privacy as a competitive advantage.
“Every organisation’s cyber security approach has to begin with understanding their risk profile. Only then can they develop a strategy to protect their assets, detect when they experience a breach and then respond and recover effectively.”