Discussions about disruptive technology and digital transformation have lately been dominating the conversations inside corporate boardrooms and among the C-suites in private companies, spilling over to some government agencies and non-government organizations.
But one of the biggest challenges in this digital age is cybersecurity, and recent high-profile breaches have shown that businesses face financial and reputational risks as well as damage to customer satisfaction.
Hans Bayaborda, Managing Director of Microsoft Philippines, said: “As companies embrace the opportunities presented by cloud and mobile computing to connect with customers and optimize operations, take on new risks. With traditional IT boundaries disappearing, the adversaries now have many new targets to attack.”
In a study conducted by global research organization Frost & Sullivan, the potential economic loss due to cybersecurity attacks in the Philippines could reach $3.5 billion or 1.1% of the country’s gross domestic product of $305 billion.
This was part of a regional survey titled “Understanding the Cybersecurity Threat Landscape in Asia Pacific” involving 1,300 business and IT decision makers in Australia, China, Hong Kong, Indonesia, India, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, and Thailand.
More than half of the Filipino organizations in the study had either experience a data breach or were not sure if they had one since they have not performed the proper forensics or data breach assessment.
Large organizations with more than 500 employees can potentially incur a financial loss of $7.5 million, over 200 times higher than the average economic loss of $35,000 for a mid-sized firm with a workforce of 250 to 500. The study also revealed that cybersecurity attacks resulted in job losses across different functions in 72% of those that experienced an incident in the last 12 months.
To calculate the cost of cybercrime, Frost & Sullivan has created an economic loss model based on macroeconomic data and insights shared by the survey respondents. This model factors in three kinds of losses that could be incurred during a cyber attack — direct, indirect, and induced.
Edison Yu, Frost & Sullivan Vice President and Asia Pacific Head of Enterprise, said: “Although the direct losses from cybersecurity breaches are most visible, they are but just the tip of the iceberg. There are many 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.”
Aside from financial losses, these incidents have undermined the ability to capture future opportunities in the digital economy, with 57% of Philippine organizations putting off digital transformation efforts because of their fear of cyber risks.
Artificial intelligence (AI) is becoming a potent weapon against cyber attacks in a world where cyber threats are constantly evolving and the attack surface is rapidly expanding. This is attributed to AI’s ability to detect and act on threat vectors based on data insights, making it indispensable in rapidly analyzing and responding to unprecedented quantities of data.
According to the survey findings, 79% of respondent organizations from the Philippines have either adopted an AI approach or are looking to adopt it toward boosting cybersecurity.
With security capabilities in short supply, businesses need to use automation to increase the capacity of their cybersecurity operations. Current advancements in AI have shown much promise, not just in raising detection levels that would otherwise be missed, but also in reasoning over how the various data signals should be interpreted with recommended actions.
An AI-driven architecture will be more intelligent as it is equipped with predictive abilities and can accomplish tasks faster than any human could. Ultimately, leveraging AI and automation can free up a company’s cybersecurity talents to focus on higher-level activities, allowing businesses to strengthen their security posture before problems emerge.
J. Albert Gamboa is CFO of the Asian Center for Legal Excellence and Chairman of the FINEX Media Affairs Committee’s Golden Jubilee Book Project.