RBNZ spells out the cost of cyberattacks

By Allen Jack

The Reserve Bank of New Zeland (RBNZ) has estimated that cyberattacks could cost New Zealand’s finance sector upwards of NZ$104mn per year.

In a study titled ‘Cyber incident cost estimates and the importance of building resilience’, the bank extolls the virtues of achieving ‘cyber resilience’ - the ability for an organisation to contain, counteract and recover from a cyberattack.

In addition to the banking sector, RBNZ calculates that $38mn could be lost annually by the insurance industry encountering similar opposition - roughly equating to 2% or 3% of yearly profits. 

More worryingly, the report also speculates that, in particularly troublesome years, costs to fight against cyberattacks could exceed $2.3bn (a heavier 34% of profits).

Taking notice of the threat

Clearly part of New Zealand’s business zeitgeist, companies have started to take closer notice of the dangers presented to corporate integrity by cyberattacks. 

Electricity retailing company Trustpower has reportedly adopted the government’s recommended measures for cybersecurity and employed Nozomi Network’s Guardian software.

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Reducing the risks posed to Operational Technology (OT) whilst unlocking visibility across internet of things (IoT) and IT applications, Guardian is currently being utilised across a wide variety of sectors, including energy, mining and construction.

“As we continued to expand, digitise and add to our operational environment, this lack of visibility presented a major challenge,” said Marty Rickard, OT Delivery Manager at Trustpower, in an article with Technology Decisions.

“We needed a new approach to cut through the noise, gain real insights into our network and ensure we were protected from cyber attacks.”

A big challenge for businesses

RBNZ believes that the remarkably adaptive and evolving nature of a cyberattack distinguishes it from other common operational risks. However, the lack of cybersecurity professionals in the New Zealand market could be detrimental to addressing it.

“According to some estimates, there could be 3.5 million job openings worldwide in this field by 2021 (Herjavec, 2019). The shortage amplifies the cost of cyber resilience and knowledge management, increases staff turnover, and bids up the cost of good expertise.”

Addressing the issue, the bank states, will require broad collaboration across the tech and finance industries and it is in everyone’s interest that such partnerships are formed. “Addressing cyber risk is a collaborative endeavour. No person is an island.”

For more information on business topics in ANZ, please take a look at the latest edition of Business Chief ANZ.

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