Produced in association with the
Australian Financial Review
Cyber Security
Australian Financial Review
special report
November 2014
kpmg.com.au
Cyber Security
KPMG in association with The Australian
Financial Review hosted a roundtable event on cyber security. Content originally produced
by the Australian Financial Review online
edition on 24 November 2014.
PANELLISTS INCLUDED:
Troy Braban,
CISO,
Australia Post
Tara Cahill,
GM Risk Group Services,
Westpac
Diona Rae,
CRO,
GPT
Tim Thurman,
CIO,
ASX Group
Simon Smith,
CIO,
Lumo Energy
Mark Tims,
Partner,
Technology Risk & Assurance,
KPMG
Gary Gill,
Partner,
Forensic,
KPMG
Adaptability key to
cyber security
ANDREW BIRMINGHAM
Businesses find themselves needing
to innovate quickly in a market place
increasingly disrupted by digital
technologies but where consumers
are increasingly aware of the
importance and value of their own
data. That puts a premium on securing
both the data and the intellectual
property spawned by innovation.
Traditionally companies applied
perimeter defences to keep the bad
guys out, and policy and forensics
to keep the bad guys inside the
organisation from getting out. But
the threat profile is evolving. With
tens of thousands of new malware
variants entering the IT ecosystem
every day the technical responses
have evolved to include continuous
detection and investigation. External
threats meanwhile have become more
sophisticated and sinister with attacks
by organised crime and state backed
agencies increasing.
For security professional like Australia
Post’s chief information security
officer Troy Braban that means that the
complexities of his role have kicked up
significantly. “On a day-to-day basis it’s
different every single day.”
“The pace has changed and so
have the adversaries, and what they
are trying to do. “The situation is
constantly in flux ,” he says.
1 | Cyber Security | Australian Financial Review special report
Cyber security has emerged as a key
risk for companies, which is why Mr
Braban is in regular contact with both
the CIO and the chief risk officer.
Indeed leadership engagement extends
all the way to the board. “We talk to
our executives and our board about
different types of people or organised
entities that want to attack us.”
While amateurs looking to test the
membrane have always been a
nuisance, in recent years hacktavism
has also emerged, most notably in
recent times through organisations like
Anonymous.
At the other end of the spectrum there
is are organised crime and [nation]
states. “So in the last two years we
have invested a lot of time in both of
those two areas.”
And in the middle – inside operators –
employees who through malfeasance
or ignorance pose a threat. “The
inside threat is one that we’ve talked
about where the risk profile stays the
same but what actually changes is
the value of the information and the
value of the interaction you’ve got with
your customer. That threat trend has
effectively stayed the same but the
impact has changed.“
FRONT LINE
For the staff on the front line of cyber
security, the threat is ever present.
“We’re constantly patching. I’ve got a
team and all they do is look after those
firewalls,” says ASX chief information
officer Tim Thurman.
He characterises the ASX as being
on the front foot but he says he also
saw the alternative during his time
in investment banking in Canada
where there were often gaping holes,
especially in legacy systems, to
which security staff were constantly
responding.
One specific area of technology that
features increasingly highly in the
conversation is cloud computing and
opinions are mixed about its impact
and security – depending on the types
of applications involved.
GPT’s chief risk officer Diona Rae
says, “We have gone to the Cloud for
our systems and infrastructure and
it’s been a very positive move for us.
We are a small IT user compared to a
bank for instance. We’re never going
to be able to spend the kind of money
that is needed to have a very robust
environment but we can get that with a
cloud provider because that’s their job.”
Ms Rae says it takes time for
executives to be comfortable. “The
Cloud is seen as something that’s
quite scary and it has potential to be
dangerous for us. However it probably
was a great solution for us from a
cyber-security perspective.”
Regulation is often seen as a barrier
to cloud adoption, although less so
these days.
“We’ve had a few conversations
with APRA around the cloud over
the last 12 months and they are very
supportive of us,” says Tara Cahill, GM
risk, group services, Westpac.
The regulator is treating issues around
the engagement, communication
and transparency much as they did
with previous discussions around
outsourcing and off shoring says Ms
Cahill. “They want to make sure that
it’s done properly, in a risk based way
with the right controls in place.”
But not for everyone is on board yet,
as Mr Thurman makes clear. “It is it’s
hard for us to utilise that service. There
are latency issues in terms of how fast
we need to be.”
That said the ASX does use some
cloud based apps such as Salesforce.
But for its core business, Mr Thurman
isn’t quite ready to buy story the
industry wants to sell, “So I build my
own internal private clouds and I offer
that service to my clients within my
data centres”
Cyber Security | Australian Financial Review special report | 2
he pace has changed and
T
so have the adversaries, and
what they are trying to do.
The situation is constantly
in flux.
TROY BRABAN
CISO,
AUSTRALIA POST
3 | Cyber Security | Australian Financial Review special report
UPSTAIRS DOWNSTAIRS
DR NO
Given the risks involved and the
business impact, many companies
have evolved beyond treating cyber
security as a technical issue. Instead
boards and executives view it is a key
business risk.
Operationalising cyber security
is important for another reason –
companies need to be able to innovate
quickly to respond to changed
circumstances as new insurgents
enter their markets and disrupt old
ways of doing business.
CIO’s are clear that technology can’t
solve 100 per cent of the problems,
instead organisations need to develop
a security-aware culture and build
upon this culture. Education is a critical
tool in this regard.
According to Ms Rae, while
employees have a high awareness
when it comes to their pin numbers
on their bank accounts or other
personal information they don’t always
bring that level of awareness to the
workplace. “Staff will want to do
things like email secure documents
to their Hotmail accounts, or use
common passwords and even share
them at work, which they would never
do with their own information. “
“Our challenge at the moment is to
get them to understand that they
need to apply the same sort of rigor
to what they do at home. Our IT guys
have a good infrastructure and they
are knowledgeable about security but
these vulnerabilities probably come
from mistakes or things that our staff
can do.”
The old paradigm where security
concerns are an excise to do nothing
no longer wash.
“We’ve got a mantra, we never say
no, it’s always no but,” according to
Simon Smith CIO, Luma Energy who
says it is important to work closely
with business managers to help them
build security into the product
offering early.
“We work across industries, with
the government, with education and
academics. When I asked our chief
information security officer for a list
of the organisations with whom we
interact globally on this the list ran to
three pages of organisations”
The bank works closely with other
financial services companies and it
makes sense to do so she says as the
our attacks are going to be very similar.
“You want to know where those weak
links are and how that all interacts. “
Collaboration is another key weapon in
the cyber security arsenal. Companies
may compete fiercely in the market
but when it comes to repelling new
and dangerous threats cooperation is
the order of the day.
According to Westpac’s Ms Cahill
collaboration necessarily casts a wide
net given the systemic risk of threats
from aggressive and sophisticated
adversaries.
Cyber Security | Australian Financial Review special report | 4
How much does
business know?
ANDREW BIRMINGHAM
As business becomes increasingly
connected to its customers, partners
and even devices, and as operations
become more digitised company
boards and leadership teams have
moved cyber security onto the top tier
of business risk considerations.
Regulatory compliance on the one
hand, and consumer expectations
for security and privacy on the other
mean that the days when cyber
security could be ignored as an arcane
consideration for technical specialists
have past.
Small wonder. A recent World
Economic Forum report highlighted
the growing systematic threat to
business and government from
highly sophisticated networks run by
organised crimes and even
nation states.
The WEF’s somewhat alarming
conclusion – the world is one
disruptive technology development
away from losing the cyber war.
In its ninth Global Risks report the
WEF flagged the risk of what it
called ‘cybergeddon’ as a result of
sophisticated cyber attacks. Just as
importantly the research identified
an erosion of public confidence as
government’s themselves start
penetrating networks and trawling
data as part of law enforcement or
any counter-terrorism initiatives.
Facebook’s recent Transparency
Report for instance revealed that
government calls of its data
are increasing.
It is little wonder then that the
country’s biggest companies are
taking such systemic challenges
very seriously.
5 | Cyber Security | Australian Financial Review special report
According to Tara Cahill, GM risk,
group services Westpac, cyber
security is hugely significant for the
bank.
“Trust is obviously core to the banking
proposition. With the amount of data
we hold and the type of data we hold
we take it extremely seriously. “
Mark Tims Partner, Technology Risk
& Assurance , KPMG, said Westpac is
not alone in this regard.
“We have certainly noticed over time
there has been a lot more education
occurring within organisations and
in the general market in terms of the
awareness about cyber security.
Boards, he says, tend to be worried
about what they don’t know. That can
be a problem with a topic like cyber
security which can naturally be very
technical
“So education and awareness are
actually quite important. “
Companies are increasingly investing
in programs to continuously monitor
and protect themselves . There are a
lot of organisations that are spending
large amounts of capital to ensure that
protection, said Mr Tims.
Even those businesses that might
not have previously considered
themselves at significant risk are
having to adjust.
According to Diona Rae, CRO of
property group GPT the organisation’s
leadership now recognises that while
they may not be as heavily system
dependent as other companies there
are vulnerabilities.
Furthermore GPT’s clients in the
retail space increasingly want to use
There are always conversations
about personal data and
increasingly about IP where
either insiders are targeting the
information or outsiders are
targeting people inside to get to
the trade secrets of the business.
GARY GILL,
PARTNER, FORENSIC,
KPMG
customer data to personalise the
consumer experience and GPT needs
to understand the issues around that.
“Up until about a year ago I don’t think
GPT really thought of itself as having
cyber risks. We’re not a high profile
public brand, we don’t carry our cash
in transactions so I don’t think people
generally thought we were really a
target. But now we’ve realised we
are,” she said.
“The challenge for us it that probably
one of our biggest vulnerabilities is
what our staff members do.”
This growing realisation of the risk
was a common theme to emerge at
a recent KPMG AFR cyber security
roundtable.
Simon Smith, CIO Luma Energy said
that when he first joined the company
awareness of the issues was very
limited. “One of the first things I did
was to get the executives to sponsor
a program. Then we brought in a third
party to help implement it. Having
the CEO and the board engaged was
important and that generated a lot of
buy-in through the organisation.”
The change at Luma is significant and
indicative of the growing importance
companies attach to the issue.
The majority of the leadership team
is now part of the security council
ensuring the issue gets visibility from
the top level, said Mr Smith. “The
board is now pushing for a hardening
of the network and systems which is
a different experience to hearing “no”
because of the implication on cost and
complexity.”
REGULATORY INCENTIVE
Like the energy sector, the banking
sector is subject to significant
regulation around data which provides
further impetus for leadership team
engagement around security.
However, according to Westpac’s
Cahill while regulation is a key
consideration and a driver, decisions
can’t begin and end with the
regulation.
“Generally we look at what’s the
minimum requirement we’d want
as an organisation anyway. Because
at the end of the day it is about the
customer, and it’s about the customer
data.”
issue that is brought into sharp relief
when stories about data breaches
make it into the public domain.
“You always get two questions. One is
what happened, and then the second
is ‘can it happen to us? ‘ Having the
answer to both of those is incredibly
important.”
While many discussions often
centre of the risk of a breach that
exposes customer data, increasingly
companies are starting to appreciate a
wider danger - the theft of intellectual
property.
Gary Gill, partner, forensics, KPMG,
“There are always conversations
about personal data and increasingly
about IP where either insiders are
targeting the information or outsiders
are targeting people inside to get to
the trade secrets of the business.”
Andrew Birmingham is the editor of
Which-50.com
Australia Post’s chief information
security officer Troy Braban, says it
is a matter of understanding what
customers want and care about. It’s an
Mergers & Acquistions Outlook | Australian Financial Review special report | 6
Juggling customer privacy
and service
ANDREW BIRMINGHAM
Great customer experience
drives loyalty, and according to
multiple studies, stronger profits
and revenues.
But great customer experience
comes at a price. In order to execute,
companies need access to customer
data such as personal preferences
and web behaviour in order to better
personalise the outcome for the
individual.
The natural tension between the
consumer’s right to privacy and
their quest for the best deal creates
a strong sub-current in the debate
around data privacy and security. And
importantly it is a key consideration
for companies as they build out their
cyber security infrastructure.
In the retail industry for instance,
data on customer behaviour is a key
competitive advantage says Diona
Rae, chief risk officer at GPT. “If you
want a good relationship with your
customers and consumers, part of
that is building trust with them.”
The paper also noted research
suggesting most consumers are
happy for companies to use their data
so long as they do responsibly and for
their benefit.
However, says Tara Cahill GM Risk,
group services, Westpac, “But it still
comes back down to the fact that the
organisation has an obligation to the
customer. It doesn’t really matter
whether we’ve got a demographic
that are quite happy for us to use
their data or a different demographic
that is very concerned about the use
of data. Our obligation is to maintain
the security of all customer data, to
use it appropriately and to take into
consideration the regulation and the
laws around the use of data. If we
maintain that then we maintain the
trust of the customer that we’re doing
the right thing with their data.”
Companies also need to understand
the consumer’s reaction to too much
personalisation.
A discussion document by David
Jones and Brad Paton published in a
Reactive whitepaper earlier this year
called Perspectives 2014 argues that
consumers are willing to concede
some privacy rights, where the pay off
is better levels of service or
lower pricing.
Luma energy CIO Simon Smith
recalls his experience working
in the retail sector. “We had the
best personalisation engine on the
website, to the point where we could
actually know when you’re about to
buy just by analysing your historical
trends. But the thing is we tipped it.
We did a lot of multi-variant tests and
found if we got too personal people
backed off because it was to spooky.”
The authors wrote “We are in an
era of convenience. There is a level
of expectation in the amount of
value that a product will immediately
provide users, catering to
their needs.”
While consumers also want and
expect that their data will be kept
securely and used transparently,
they may not have the same
concerns about where the data
physically resides.
7 | Cyber Security | Australian Financial Review special report
According to Australia Post chief
information security officer Troy
Braban, “We’ve done some research
and there’s been some other papers
around this. If you give customers
two choices, do you want a secure
offshore location or an insecure
onshore location then of course
they’re going to pick the secure
offshore. Then if you ask the question
do you want a secure offshore or
secure onshore, the answer is almost
certainly always ‘ I don’t care as long
as it’s secure.’ It is less about storage
location, and sovereignty, customers
just want to know their data is secure.”
BREACH HEAD
Companies also have to consider the
implication of data breaches, sadly a
fact of life in online commerce.
While Australia lacks the mandatory
disclosure laws found in jurisdictions
like California, many IT security and
risk management professionals still
hold to the view that it’s better to tell
the customer sooner rather than later.
out you had a breach six months
month later I think that damages the
reputation quite badly. But obviously
you’ve got to be careful about what
you say and when you say it.”
Gary Gill, Partner, forensics, KPMG
asks “If you think about it from a
reputational risk, how does it impact
your reputation? If you wait too long
and don’t disclose and then it comes
Our obligation is to maintain the
security of all customer data, to
use it appropriately and to take into
consideration the regulation and the
laws around the use of data.
TARA CAHILL,
GM RISK GROUP SERVICES,
WESTPAC
Cyber Security | Australian Financial Review special report | 8
The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG,
an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International.
The information contained in this document is of a general nature and is not intended to address the objectives, financial situation
or needs of any particular individual or entity. It is provided for information purposes only and does not constitute, nor should it be
regarded in any manner whatsoever, as advice and is not intended to influence a person in making a decision, including, if applicable,
in relation to any financial product or an interest in a financial product. Although we endeavour to provide accurate and timely
information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be
accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination
of the particular situation.
To the extent permissible by law, KPMG and its associated entities shall not be liable for any errors, omissions, defects or
misrepresentations in the information or for any loss or damage suffered by persons who use or rely on such information (including
for reasons of negligence, negligent misstatement or otherwise).
© 2014 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International
Cooperative (“KPMG International”).
Liability limited by a scheme approved under Professional Standards Legislation.
November 2014. VICN1248MKT.