MICROSOFT in a special media forum last Tuesday held at the Grand Hyatt Hotel in Taguig outs the result of a recent study conducted by Frost & Sullivan that revealed a staggering 3.5 Billion USD financial loss in the Philippines due to cybersecurity incidents.
The study involved a survey of 1,300 business and IT decision makers ranging from mid-sized organizations (250 to 499 employees) to large-sized organizations (more than 500 employees) and revealed that more than half of these organizations have either experienced a cybersecurity incident (18%) or are not sure if they had one as they have not performed proper forensics or data breach assessment (34%).
The media forum had four security experts in the panel to discuss and answer questions about the economic impact of cybersecurity incidents in the Philippines, they were:
- Hans Bayaborda, Managing Director of Microsoft Philippines
- Mary Jo Schrade, Assistant General Counsel of Microsoft Digital Crimes Unit
- Lito Averia, Jr., President of PhCERT or Philippine Computer Emergency Response Team
- Atty. Raul Cortez, Corporate, External, and Legal Affairs Lead of Microsoft Philippines
“As companies embrace the opportunities presented by cloud and mobile computing to connect with customers and optimize operations, they take on new risks,” said Hans Bayaborda, Managing Director, Microsoft Philippines. “With traditional IT boundaries disappearing the adversaries now have many new targets to attack. Companies face the risk of significant financial loss, damage to customer satisfaction and market reputation — as has been made all too clear by recent high-profile breaches.”
The study conducted in the Philippines have revealed two very important things:
- A large-sized organization in the Philippines can possibly incur an economic loss of US$7.5 million, more than 200 times higher than the average economic loss for a mid-sized organization (US$35,000); and
- Cybersecurity attacks have resulted in job losses across different functions in seven in ten (72%) organizations that have experienced an incident over the last 12 months.
According to Mr. Lito Averia, the biggest cybersecurity threat that PhCERT was able to face in the last couple of years was the one that happened with Comelec in 2016.
Mary Jo Schrade who discussed the details of the study said that to calculate the cost of cybercrime, Frost & Sullivan has created an economic loss model based on macro-economic data and insights shared by the survey respondents. This model factors in three kinds of losses which could be incurred due to a cybersecurity breach:
- Direct: Financial losses associated with a cybersecurity incident – this includes loss of productivity, fines, remediation cost, etc;
- Indirect: The opportunity cost to the organization such as customer churn due to reputation loss; and
- Induced: The impact of cyber breach to the broader ecosystem and economy, such as the decrease in consumer and enterprise spending.
In a statement, Edison Yu, the Vice president and Asia Pacific Head of Enterprise for Frost & Sullivan explained that although the direct losses from cybersecurity breaches are most visible, they are but just the tip of the iceberg. And that there are many other hidden losses that we have to consider from both the indirect and induced perspectives, and the economic loss for organizations suffering from cybersecurity attacks can be often underestimated.
In addition to financial losses, cybersecurity incidents are also undermining the Philippines organizations’ ability to capture future opportunities in today’s digital economy, with more than half (57%) respondents stating that their enterprise has put off digital transformation efforts due to the fear of cyber-risks.
Besides external threats, the research also revealed key gaps in organizations’ cybersecurity approach to protect their digital estate:
- Security an afterthought: Only 44% of organizations consider cybersecurity before the start of a digital transformation project. Majority of respondents (56%) either think about cybersecurity only after they start on the project or do not consider it at all. This limits their ability to conceptualize and deliver a “secure-by-design” project, potentially leading to insecure products going out into the market;
- Creating a Complex Environment: Negating the popular belief that deploying a large portfolio of cybersecurity solutions will render stronger protection, the survey revealed that 17% of respondents with more than 50 cybersecurity solutions could recover from cyberattacks within an hour. In contrast, more than twice as many respondents (38%) with fewer than 10 cybersecurity solutions responded that they can recover from cyberattacks within an hour; and
- Lacking cybersecurity strategy: While more and more organizations are considering digital transformation to gain competitive advantage, the study has shown that 46% of respondents see cybersecurity strategy only as a means to safeguard the organization against cyberattacks rather than a strategic business enabler. A mere 25% of organizations see cybersecurity strategy as a digital transformation enabler.
“The ever-changing threat environment is challenging, but there are ways to be more effective using the right blend of modern technology, strategy, and expertise,” added Hans. “Microsoft is empowering businesses in the Philippines to take advantage of digital transformation by enabling them to embrace the technology that’s available to them, securely through its secure platform of products and services, combined with unique intelligence and broad industry partnerships.”
Artifical Intelligence (AI) – The Next Frontier in Cybersecurity Defense
In a digital world where cyberthreats are constantly evolving and attack surface is rapidly expanding, AI is becoming a potent opponent against cyberattacks as it can detect and act on threat vectors based on data insights. The study reveals that more than almost four in five (79%) organizations in the Philippines have either adopted or are looking to adopt an AI approach towards boosting cybersecurity.
AI’s ability to rapidly analyze and respond to unprecedented quantities of data is becoming indispensable in a world where cyberattacks’ frequency, scale and sophistication continue to increase.
An AI-driven cybersecurity architecture will be more intelligent and be equipped with predictive abilities to allow organizations to fix or strengthen their security posture before problems emerge. It will also grant companies with the capabilities to accomplish tasks, such as identifying cyberattacks, removal of persistent threats and fixing bugs, faster than any human could, making it an increasingly vital element of any organizations’ cybersecurity strategy.
AI is but one of the many aspects that organizations need to incorporate or adhere to in order to maintain a robust cybersecurity posture. For a cybersecurity practice to be successful, organizations need to consider People, Process and Technology, and how each of these contributes to the overall security posture of the organization.
To help organizations better withstand and respond to cyberattacks and malware infections, Atty. Raul Cortez shared five best practices to consider in improving defense strategy against cybersecurity threats.
Cybersecurity Best Practices
- Position cybersecurity as a digital transformation enabler: Disconnect between cybersecurity practices and digital transformation effort creates a lot of frustration for the employees. Cybersecurity is a requirement for digital transformation to guide and keep the company safe through its journey. Conversely, digital transformation presents an opportunity for cybersecurity practices to abandon aging practices to embrace new methods of addressing today’s risks;
- Continue to invest in strengthening your security fundamentals: Over 90% of cyber incidents can be averted by maintaining the most basic best practices. Maintaining strong passwords, conditional use of multi-factor authentication against suspicious authentications, keeping device operating systems, software and anti-malware protection up-to-date and genuine can rapidly raise the bar against cyberattacks. This should include not just tool-sets but also training and policies to support a stronger fundamental;
- Maximize skills and tools by leveraging integrated best-of-suite tools: The best tools are useless in the hands of the amateur. Reduce the number of tools and the complexity of your security operations to allow your operators to hone their proficiency with the available tools. Prioritizing best-of-suite tools is a great way to maximize your risk coverage without the risk of introducing too many tools and complexity to the environment. This is especially true if tools within the suite are well-integrated to take advantage of their counterparts;
- Assessment, review and continuous compliance: The organization should be in a continuous state of compliance. Assessments and reviews should be conducted regularly to test for potential gaps that may occur as the organization is rapidly transforming and address these gaps. The board should keep tab on not just compliance to industry regulations but also how the organization is progressing against security best practices; and
- Leverage AI and automation to increase capabilities and capacity: With security capabilities in short supply, organizations need to look to automation and AI to improve the capabilities and capacity of their security operations. Current advancements in AI has shown a lot of promise, not just in raising detections that would otherwise be missed but also in reasoning over how the various data signals should be interpreted with recommended actions. Such systems have seen great success in cloud implementations where huge volumes of data can be processed rapidly. Ultimately, leveraging automation and AI can free up cybersecurity talents to focus on higher-level activities
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