New data breach reporting legislation deemed cyber game changer in Australia

Australia’s business landscape will be transformed under new mandatory reporting legislation for data breaches which will take cyber security from the IT department to the boardroom, according to a white paper released by QBE Insurance.

Businesses in Australia will need to ensure that stringent data management and cyber security measures are in place or risk facing compliance, financial and reputational ramifications.

New legislation, passed in the Senate in February, requires mandatory reporting of any data breaches to both the privacy regulator as well as the affected customers. It will apply to all businesses with a turnover of more than A$3 million, health service providers, credit reporting bodies, credit providers and tax file number recipients. The costs associated with notification can be crippling with data from the US indicating the average cost per lost or stolen record to be $221.

QBE cyber insurance expert, Ben Richardson, said the new legislation emphasises the need for data management and cyber security practices to be escalated and reviewed within a company’s overall risk management framework to ensure that they are fit for purpose.

“It means, certainly as far as ASX-listed companies go, that if the data breach is serious enough to affect the share price or a specific class of individuals, like employees, then legal and regulatory action against directors and officers will move into scope,” Richardson said.

“This clearly illustrates the need for cyber security to shift from the IT desk to the boardroom. “In future, company boards will need to ensure they are well across their organisation’s security practices and encourage a strong security culture to avoid being placed in the firing line.”

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