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Survey shows cybercrime on the mainland and HK on the rise
Average financial losses from cybercrime in Hong Kong and the Chinese mainland climb to US$2
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verage financial losses from cybercrime in Hong Kong and the Chinese mainland climb to US$2.4 million in 2014, up 33 per cent from a year earlier, according to a survey by international accounting firm PricewaterhouseCoopers, or PwC.
In comparison, the global average increased 34 per cent in the same period.
"Current and former employees are the most-cited culprits of security incidents both for Chinese and global companies,' PwC said.
Results of the survey showed that 41 per cent of mainland and Hong Kong respondents said that former employees are the most likely inside source of security incidents, versus 33 per cent globally.
Besides the threats from current and former employees, 47 per cent of mainland and Hong Kong respondents (versus 24 per cent globally) said they believed that their competitors were among the prime suspects to commit cybercrime causing financial losses.
"It is a quite common phenomenon especially on the mainland that a company suffers financial losses from detected security incidents that are conducted by their competitors,' said Kenneth Wong, a partner in PwC's risk assurance practice. 'Financial losses due to the theft of trade secrets is astounding,' he said.
Wong said that financial losses due to the theft of trade secrets are estimated to range from $749 billion to as high as $2.2 trillion annually. 'And if we base on a simple calculation using 4 per cent as the mainland and Hong Kong respondents out of our total population of survey respondents, this would amount to $30 billion to $90 billion,' noted Wong.
Security compromises are a persistent and globally pervasive business risk. Most such risks are exposed by outsiders, including law enforcement agencies and fraud monitoring agencies as well as consultants, the survey showed.
Despite the high risks, security budgets have declined or remained the same in 2014. 'Many organisations are undoubtedly worried about the rising tide of cybercrime, yet many have not increased their level of investment in security initiative accordingly,' said Dan Kelly, a manager of forensic services at PwC. Global investment solutions budgets actually decreased by 4 per cent from 2013. And security spending as a percentage of the total IT budget has remained at 4 per cent or less in the past five years.
Even though many mainland and Hong Kong respondents reported that they have data protection policies in place, they cited lack of a security strategy or vision as a main obstacle to an effective security programme.
To prepare for the cybercrime threats of tomorrow, PwC said that a company should try to ensure that its cyber security strategy is aligned with business objectives and identify the most valuable information assets as well as prioritise protection of high-value data. What's more, a company should understand its adversaries and assess cybersecurity of third parties, PwC said. Collaborating with others to increase awareness of cyber security threats and response tactics is also critical to avoid financial losses, it said. (***)(+++)
