Cyber security: Many Australian CEOs yet to join up the dots

Disconnects are common in the business world. If they weren’t, share markets would move in a straight line and entrepreneurs would have a hard time making money from the next big thing.

Disconnects also have a nasty way of catching up with you if you don’t watch out. It’s that sort of disconnect that leaps out from the Australian results from KPMG’s new cyber security report, Cyber security: A failure of imagination by CEOs, based on the Global CEO Outlook Study 2015 of more than 1200 CEOs.

According to the study, global CEOs are grappling with escalating competitive pressures. 86 percent are concerned about the loyalty of their customers, 66 percent about the relevance of their products and services, and 72 percent are struggling to keep up with new technologies.

Australian CEOs, for their part, are worried about technology disruption. That’s because new entrants building on fast, scalable and pervasive technology platforms can now win over customers by delivering a better customer experience from anywhere in the world.

The survey found that 37 percent of Australian CEOs thought emerging technology risk was one of the biggest risks they faced, compared with 21 percent of CEOs globally.

But here’s the kicker: Only 35 percent of Australian CEOs were fully prepared for a future cyber security event, well behind the global average of 49 percent and not even in the same ball park as U.S. CEOs, where the figure was 87 percent.

The connection that many Australian CEOs don’t seem to make is that the most innovative companies see cyber security as a customer experience and revenue opportunity, not just a risk that needs to be managed or a line item in the budget.

Customer facing digital business platforms, for example, have cyber security at their core, serving not only to protect information but also to identify and profile users and enable deep customer/client relationships.

Innovative organisations are finding ways to turn cyber security into a selling point. Banks, for example, are starting to replace outdated security processes with Touch ID, improving security and making their customer facing systems more user friendly at the same time.

In other key findings from the cyber security survey, one out of five global CEOs indicated that information security is one of the risks they are most concerned about. Amongst Australian CEOs the figure was even higher at 29 percent.

In a more promising result, 88 percent of Australian CEOs had taken pre-emptive steps to appoint a cyber security executive or create a cyber security team, much higher than the global figure of 50 percent.

And 56 percent of Australian CEOs had also taken pre-emptive steps to convene multiple meetings with the board about cyber security, more than their global counterparts at 46 percent.

While only 23 percent of Australian CEOs had taken pre-emptive steps to convene multiple meetings with their cyber security team, fewer than the global result of 37 percent, 73 percent of Australian CEOs were planning to do so in the next 3 years.

Let’s hope something positive comes out of these initiatives. Perhaps the penny will drop that building cyber security into products and processes not only improves preparedness against attack, but can also provide the competitive advantage CEOs and companies are looking for.

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