Seven trends for the cyber and forensics landscape

In a new white paper, experts from McGrathNicol have identified seven key trends that are set to shape the cyber and forensics landscape in 2020. A round up of the seven trends.

More value from cyber systems

Monitoring digital activity – be it from within the organisation or outside – is crucial to detecting and preventing cyber threats, although this represents an imposition on employees and individuals within a business. Under a stringent regulatory environment, prevention is becoming increasingly crucial, putting businesses in a tough spot.

According to McGrathNicol’s experts, new technology such as advanced analytics and artificial intelligence (AI) will help organisations toe the line between monitoring digital activity and maintaining distance, thereby creating tremendous value. These tools can detect deviations with speed and accuracy, only drawing human intervention when it is necessary. Investments in cyber tech are increasing, and this is expects to only grow further.

A bigger focus on compliance

The firm’s expert note a shift in Australia’s regulatory tone from relatively moderate to very strict, evidenced by the Royal Commission inquiries and their impact on the financial sector. As explained by the firm, organisations “are expected to not only embrace the letter, but the spirit of the law, and implement programs to embed a compliance culture.”

A compliance culture can be cultivated through: a comprehensive compliance programme that anticipates and monitors regulatory change; routine risk assessments; training programmes on individual responsibilities; safeguarded whistleblower protocols; better compliance reporting; and a dedicated team to constantly improve compliance mechanisms.

According to the consulting firm, businesses are set to ramp up investments and the involvement of senior leadership in all these areas, alongside tech investments, which also have potential to promote compliance.

More independent corporate investigations

Under a tightened regulatory atmosphere, McGrathNicol expects businesses to undertake more thorough investigations into corporate misconduct.

While doing so, the experts suggest that businesses: ensure the investigation is conducted by an autonomous team with investigative experience; ensure the team safeguards whistleblowers; engage a legal team to comment on the way forward after an investigation; ensure the team handles evidence appropriately, and demands regular updates on the investigation to deliver on a reasonable timeline.

More safeguards against foreign interference

Hostile foreign actors – be it state actors, hackers or other hostile groups – are increasingly targeting vulnerable cyber security mechanisms to gain sensitive personal and financial information. Foreign interference has thus become an issue of national security, and McGrathNicol predicts significant investments in Countering Foreign Interference (CFI) mechanisms.

Such mechanisms involve an integrated approach to risk management, as well as improvements to accountability, transparency and due diligence systems.

More involvement from directors

Directors and board members are expected to be more involved in risk management and investigations. This is not only because of more integrated risk management frameworks, but also due to an increase in the frequency and intensity of litigation against directors in the event of an incident.

In the financial services sector, directors are subject to legal action and a compensation cut if they are not deemed to have played their part in prevention, while similar mechanisms are expected for other sectors as well. As a result, experts anticipate more involvement from directors in disputes, inquires and overall risk management.

Increasing incidence of underpayments

As payrolling and labour rgulations in Australia grow more complex, a number of incidents have emerged of organisations of various sizes underpaying their employees, albeit inadvertently. What ensues is a whirlwind of legal, accounting and communications costs, as businesses look to resolve the issues with their employees while maintaining their public reputations.

“As regulatory surveillance, an organisation’s self-audit, or a media exposé may reveal, we will see the continued trend of payroll investigations and remediation programs well into 2020,” predict the experts at McGrathNicol.

A shift from the courts to arbitration

Finally, the firm’s consultants point out that arbitration as a concept is rapidly gaining popularity over the courts system in Australia. Contrary to the courts, arbitration allows for more confidentiality, more flexibility, more control over who conducts the arbitration and where, and consequently a more cost effective dispute settlement process. A recently held International Arbitration Conference in Australia is an indication of the business environment’s keenness on arbitration.

The seven trends were put together by McGrath Nicol's cyber and forensics teams across Sydney, Melbourne, Brisbane, Perth, Canberra and Auckland.