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Asia's Business Leaders Increasingly Worried About Cybercriminals
Tom Burroughes
29 February 2016
Hackers and other criminals are finding more ways to break into Asian businesses and threaten security, according to a survey on global crime issues from PricewaterhouseCoopers. While the PwC report did not specify results for wealth managers, it said that 32 per cent of Hong Kong/Macau firms surveyed were in financial services, and 14 per cent of mainland China firms were in this segment. Fieldwork for the survey was conducted between July and September last year. A total of almost 200 firms in the Asian part of the survey were polled. Globally, PwC surveyed 6,300 firms in 115 nations. “Cybercriminals thrive on dynamic environments such as Hong Kong, a technology-dependent financial hub, and Macau, a major gaming centre, with findings from the 2016 GEC Survey suggesting that unprepared organisations are now more exposed than ever. At the same time, we can see that companies in the mainland that fail to establish robust compliance practices face the very real risk of serious financial and reputational damage that can result from investigations by regulators,” said John Donker, PwC China and Hong Kong lead forensic services partner. While cyber-attacks are more common, the survey showed that just under half of firms surveyed (49 per cent) considered they were unlikely to be attacked over the next 24 months. “The 2016 GEC Survey findings suggest a persisting issue relating to the awareness of cybercrime,” said Megan Haas, PwC cybersecurity and privacy consulting leader for Hong Kong and China. “Effective solutions need to move beyond technology departments and become ingrained in strategy so that all staff, up to and including the board of directors, are aware of the issues,” Haas added. Findings from the survey also revealed how difficulties recruiting suitably qualified or experienced personnel were reported as being a significant hindrance to many organisations’ anti-money laundering programmes. In mainland China, the dangers of fraud perpetrated by current or former employees echo prior survey results, reiterating that "the inside job" remains a real and persistent threat. In particular, 63 per cent of respondents noted that the most serious losses due to economic crime were a result of fraud by staff members, compared to a global average of 46 per cent.
PwC’s 2016 Global Economic Crime Survey shows that more organisations in Hong Kong and Macau have reported experiencing economic crime during the last 24 months, increasing to 21 per cent of respondents from 16 per cent in 2014. In mainland China, 28 per cent of respondents said they had experienced economic crime, compared with 27 per cent in 2014.
As recounted by this news service, wealth managers have become more concerned about cybercrime, and other types of economic crime. (See here.) A number of widely reported cyber-attacks on banks and institutions such as America’s Internal Revenue Service, for example, have underscored the scale of the threat. Threats can take a number of forms. In Asia, for example, the Hong Kong Monetary Authority regularly warns the public about fake websites set up to grab private financial details; last year, there was a huge cyber-attack on JP Morgan in the US, affecting 76 million accounts (although no actual data or money was stolen).
In Hong Kong and Macau, the biennial survey found that half (50 per cent) of respondents experiencing economic crime reported being the victims of cybercrime, compared to 37 per cent in the 2014 GEC Survey. Additionally, 51 per cent of Hong Kong and Macau-based respondents said they perceived the risk of cybercrime to have increased during the last 24 months, rising from 39 per cent in 2014, and in line with the global average of 53 per cent.
Concurrently, 46 per cent of mainland China-based respondents who reported that their organisations had been the victims of economic crime categorised the crime as bribery and corruption, marking an increase from 39 per cent two years ago. Further, 38 per cent of mainland China-based respondents anticipated their organisation would experience bribery and corruption in the next 24 months, which compares to 14 per cent in the US, and an average of 35 per cent for the BRICS nations.
Some 46 per cent of respondents said that their board members did not actively participate in overall cybersecurity strategy, a fact that may have to change if attacks increase.
In mainland China, only 13 per cent of respondents who had experienced economic crime during the last 24 months identified it as cybercrime, despite the growing role of online and mobile commerce there.