The roadmap to compliance: The intersection between risks, regulation and security
Australian organisations have been quick on the uptake of new technologies, including digital transformation, cloud computing, and the hot-topic generative AI. However, with this uptake, organisations are finding themselves exposed to new risks. The 388% increase in data breaches in 2024 demonstrates this, as cyber attackers begin to capitalise on these vulnerabilities.
In response to these breaches, the Australian Government has allocated additional budget to help businesses improve their security and compliance infrastructure. It's hoped this fiscal support will help make it easier for organisations to achieve the right balance between security, organisational resilience and regulatory compliance while ensuring continuity of their day-to-day operations.
Finding the intersection between risk, compliance and security for organisations is key to ensuring the integrity and confidentiality of their data, to maintain customer trust while complying with regulatory standards.
Understanding Risk within a Compliance Framework
As the Australian Government continues to scrutinise and tighten data regulations across industries, many organisations are relooking at current policies to ensure they have a clear and comprehensive compliance roadmap to mitigate risk, protect their citizen's data and strengthen operational resilience. This all centres on risk management.
However, 'risk' is not a universally consistent phrase across teams within an organisation. For an ICT team, risk refers to uptime, availability, security of data, contractual stability and management of costs – ensuring that ample resources are available and well managed.
Despite ICT teams' efforts to manage these risks, vulnerabilities remain if data is being transferred between parties - which is why secondary breaches answer for 20% of all Australian data breaches reported between July and December 2023.
Strategically, organisations may try to lessen the suppliers they engage with to decrease the likelihood of data breaches. However, single supplier failure can pose just as great a risk to operational resilience, incurring software outages and loss of pricing leverage.
For the Financial Services Industry (FSI), organisations are encouraged to choose technologies that are vendor agnostic so as not to be locked into a single provider. This means that these organisations can manage risk from a technical perspective because it gives them more flexibility on where data is. APRA's CPS230 regulation reinforces this sentiment, stipulating that all FSI must be vendor-agnostic by July 2025 to reduce the vulnerabilities that are being exposed in Australia's second most breached sector.
Why Organisational Resilience Must Start with Security
It is increasingly important for security, business and technology C-suite leaders to work more closely together to ensure security, compliance and innovation are mutually supported.
The division of responsibility between teams and the intersectionality of compliance, risk and security are fundamentally linked. Security is implemented through mandates and policies, just like regulations, however, the teams that carry it out are ICT or Risk management. Clear communication between these departments, therefore, is a must.
Recent research shows that a significant proportion of cross-functional leaders, specifically 79%, encounter substantial obstacles in collaboration during digital growth projects. This challenge results in them being 37% less likely to surpass their revenue and profitability goals compared to those leaders who face fewer collaboration hurdles.
The benefits of leaders encouraging cross-functional communication between these teams will allow regulations to be implemented to the highest degree, ensure that data is flowing where it needs to, and increase organisational resilience.
However, leaders must also consider not only their internal lines of communication but also external lines and operations within suppliers and service providers. With new regulations around data sovereignty and transfer between regions, having control over where data ends up is the main priority. Organisations must ensure that they can follow the trail of data and maintain control over it – whether that be locking out specific service providers if needed.
The Road to Achieving Compliance Success in Today's Regulatory Landscape
Finding the intersection between security, risk, and compliance is an imperative task for business leaders in the current regulatory landscape. One way to achieve this could be to leverage a BYO cloud or account option, which could allow organisations to run services within their environment without losing control of where their data is going – i.e. third-party providers.
Leaders need to make sure they have the flexibility to limit access when necessary and ensure that services continue to run smoothly and backups are maintained. Selecting the right managed services partner can significantly reduce these risk events and support teams, leading to substantial cost savings.
To ignore the issue would be to expose the organisation to an average impact value of $300,000, with four potential events in the first year of operations. This could lead to an overall cost to a company, in one year, of 1.2 million dollars.
Managed services that are reliable, scalable and innovative are the best options for companies – in terms of uptime and data security, growing with business needs, and adoption of technologies.
Organisations must remain vigilant in terms of security management, especially with new risks from digital transformation. Now is the time to act while also ensuring you have the right technology partner, who understands your compliance needs, for the journey ahead.
