Cyber security risk needs to be “front and centre” of advisers’ mind, according to the Australian Securities and Investments Commission (ASIC), with the regulator likely to have increased supervision in this area going forward.
Appearing at FINSIA’s ‘The Regulators’ event, ASIC commissioner, Cathie Armour, said the case of RI Advice has brought cybersecurity into the public eye as it was the first of its kind in Australia.
While this occurred before March 2019 therefore not incurring a penalty, future breaches by firms after this date would incur significant penalties of as much as $525 million.
Armour said: “This is a fundamental issue and it needs to be front of mind for all of us. So the advice is to make it front and centre, it is not an IT issue, it’s a business strategy and business leadership issue. You need to be really focused on it.”
She said it was important that firms had assessment systems in place and were prepared to work out how to address any issues that arose. They should also make sure management was involved rather than it being delegated to a third party or IT department.
“What I think is really important is you start to run scenarios. Make sure your senior management is involved and they’re not sending off a sort of a proxy for them, they’re actually involved. Your boards are involved even as in running those scenarios. And they absolutely know how they’re going to deal with the issues because they will arise and you need to have arrangements in place.
“So just really have a look if you haven’t engaged with it, but the main thing is to be making sure that the leadership of your firm is really engaged with the problem, it’s not the IT department’s problem.”
ASIC was likely to enact more enforcement actions in this area in the future and would be working closely with other agencies on the matter.
“We work closely with APRA to coordinate our supervision in this area, readily deferring to the work done by APRA’s teams under its cybersecurity strategy when we’re looking at your regulated firms, and we actively participate in the Council of Financial Regulators cyber work and have been very involved in the work by the Department of Home Affairs on the critical infrastructure legislation.”
