Friday, November 4, 2016

Cyber attack threats expose Australia to $16 billion risk, warns global insurer Lloyd's

The growing risk of cyber attacks leaves the Australian economy exposed to a potential $16 billion dollar damage bill over the next decade, according to one of the world's biggest insurance companies.

In a joint study with Cambridge University, the Lloyd's insurance giant has found that out of 301 global cities, Sydney ranks 12th in terms cyber attack exposure with $4.86 billion of economic growth at risk.

In its City Risk Index 2015-2025, Lloyd's says Sydney is the riskiest Australian city followed by Melbourne, Brisbane, Perth, Adelaide and Canberra.

Globally, Lloyd's warns that $294 billion is at risk as attempted and successful cyber attacks become more prevalent.

The warning comes after recent evidence of attempted cyber attacks at the Bureau of Meteorology, the Australian Bureau of Statistics and the Reserve Bank of Australia.

Lloyd's global chief executive Inga Beale told The World Today that dealing with the constant threat of cyber attacks is now critical for businesses of all sizes.

"It's not just for banks to worry about - it impacts retailers, travel and hospitality firms, education and healthcare providers, and any business with proprietary information worth protecting," Ms Beale said.

"Where a decade ago people would talk about preventing a cyber-attack, the reality is firms will be subjected to attacks. The issue is how you mitigate against that."

The Australian Cyber Security Centre recently said systems in government agencies had been hit with 1,095 cybersecurity incidents considered serious enough to trigger an operational response.

The Lloyd's study points to a report from the accounting firm PWC which highlights a 109% increase in detected security incidents in Australian companies, compared to a 38% global average.

Under proposed legislation before the Australian parliament, hacked companies that lose personal details, tax file numbers, medical records or credit card information would be required to report the incident and alert customers.

But Inga Beale warns that while big business and government agencies are at most risk, private individuals are at risk from personal information stored in smartphones and personal computers.

"We are living in a world where people carry a globally-connected supercomputer in their pocket and almost every important work document is stored in the cloud, on servers or online," Ms Beale said.

"The result is an explosion in the potential for cyber risk. The latest series of high profile data breaches is just the beginning. With the emergence of the Internet of Things the potential for cyber risk is enormous."

As one of the world's major insurers and reinsurers, Lloyd's is now seeing demand for cyber attack cover form a major part of its traditional business of insuring for global natural disasters and catastrophes.

Lloyd's says demand cyber insurance in Australia has increased by 16,828 percent in the past two years as businesses seek protection from current and emerging threats.

The Lloyd's index points to a range of other risks including power outages, terrorism, sovereign default, oil price shock, heatwave, drought and floods.

Thursday, November 3, 2016

Consumers need greater rights to private data, Productivity Commission urges

Australian laws regulating access to personal private data are out of date and need to be overhauled to get in line with the digital age, according to a report out today.

The Productivity Commission says a move to mandate unrestricted access to private data is in the national interest and wants the government to introduce legislation to force government agencies and the private sector to share private information.

Read the Productivity Commission report

Under the proposed reforms, consumers could demand access to private data held by banks, GPS providers, insurer companies, doctors, health insurers and social media giants like Facebook.

In a world is rocked by digital disruption and a deluge of private data being held by governments and private companies, the Commission points to a data overhaul as top ten economic reform to the Australian economy.

Listen to the full interview with Productivity Commission chairman Peter Harris

While existing privacy laws would remain in place, the draft report says greater data sharing would create better competition, allow consumers to know more about their digital lives and maybe even get a better deal with a bank or on their power bills.

The Commission is proposing greater data access rights for consumers with the creation of a "Comprehensive Right" which would also include a greater ability for people to opt out of data collection activities.

Productivity Commission chairman Peter Harris told The World Today that while data is a major asset to Australia's economy, consumers currently have limited rights on accessing and levering their own personal information.

"Surprising though it may be to many, individuals have no rights to ownership of the data that is collected about them," Mr Harris said.

"Data is increasingly an asset, and when you create an asset you should have the ability to use it, or not, at your choice."

The data law reforms would give consumers the right to direct government agencies and private companies to transfer their information to a third party as part of a major shift in competition policy.

The Commission says the transfer of data would help consumers strike a better deal by making sectors such as financial services and energy utilities compete for business.

"This will give people and businesses who want to be active consumers genuine control over their data and will allow innovative businesses and governments the chance to offer those consumers better services," Mr Harris said.

The report also points to greater opportunities for improved health care, safer and more efficient infrastructure and machinery maintenance through "data driven" competition.

However the report warns it is a misconception that cyber risks will be limited if consumers continue to be denied access to their personal data.

"The risks from the proposed reforms are no greater than the risks today that are managed by any consumer who chooses to click a mouse and buy or subscribe to a product," Mr Harris said.

"And the same advice applies: be very choosey about who you share your data with."

The Commission warns Australia is "rapidly falling behind" other developed economies like the UK, US and New Zealand in reforming data access laws.

The proposed reforms are likely to be opposed by government agencies and private companies.

The Commission is calling for submissions and will hold public hearings on the proposed reforms later this month.