IBM has well and truly branched out from the PC market of old to become so much more. One of those branches includes cybersecurity – an area some might say is still being born.

John Martin is IBM New Zealand's security practice leader. He helps businesses apply technical security controls for legislation and compliance purposes. He also helps businesses take a perspective of privacy by design and security by design.

I talked to him about the state of breach reporting through the likes of GDPR and Australia's Privacy Amendment (Notifiable Data Breaches) Act 2017, also known as NDB. We also talked about whether New Zealand needs mandatory breach reporting and what New Zealand businesses should be doing to prepare.

NDB is now an acronym known to security professionals and enterprises in Australia, and it has also been publicised worldwide. Do New Zealand firms need to worry about compliance? Only if those firms are subsidiaries of Australian firms, Martin says.

“Most of our financial institutions are owned by Australian banks. They would potentially have controls in place to make sure Australians travelling to New Zealand have held that data to the correct level.

“The original organisation could be held liable, not necessarily the New Zealand subsidiary. They would want to remove the risk that they get penalised.

While Australian firms are rolling out measures for data protection, does that mean it would be easier for New Zealand subsidiaries to roll out those measures here? Martin says that is possible.

“Privacy and security need to be part of an organisation's culture.

With New Zealand's Privacy Bill now going through its first reading in parliament, Privacy Commissioner John Edwards is reviewing whether penalties are necessary for organisations that have not protected data to a required level.

But until something comes of it, Martin says organisations are hoping they have the right controls in place.

“Globally, on average 60 data records are stolen every second. In the US, the cost of a data record in terms of its value is about US$142.

 Data is more valuable than oil. The dark web is trading in data and making money, while legitimate organisations are prevented from doing the same. Martin says data is so important that we need data control legislation.

“The Privacy Commissioner has an honesty box approach: ‘come to me first when you have confirmed there is a data breach. If you tell me first, I'll do my best to protect you and help you deal with the incident'”.

Martin believes that if situations are resolved before they are made public, it could prevent New Zealand organisations from losing their brand, reputation and trust. A better option, he says, than trying to mop up afterwards.

“New Zealand businesses should be reporting by default – some are not likely to pay attention unless it actually means something to them. It's good to have privacy laws in place – it looks like compliance and regulations are going to be part-and-parcel with it.

“New Zealand has tended to be focused on technology rather than security, people and process. If you don't get that balance right, an organisation has many tools and no collaboration. Therefore, you're not getting security intelligence from them because they're not talking.

Fortresses and firewalls are still barriers but web, mobile, wireless, and email bypass the old controls. It's about visibility and data discovery to assess how exposed a business is.

“Find out where the data is, what controls you have and what risks you have. There are going to be a few surprises.

If an organisation decides to implement a cloud feature and finds employees have already done that, data could be potentially slipping out of organisations without any control or awareness, Martin says.

A response strategy is also important because breaches are inevitable.

“Greater visibility will help you to analyse and assess the situation, and then resolve it. The quicker that happens, the lesser impact and cost to the organisation.

With that in mind, does New Zealand really need mandatory breach notification? Martin says we do. Consumers don't want to do business with an organisation they can't trust with their data.

The European Union's General Data Protection Regulations (GDPR) are a little different to Australia's NDB.

“There are some applicability clauses that New Zealand organisations need to be aware of. A couple of articles raise legal questions that need to go through legal representatives to make sure they are not being misrepresented.

“If you're dealing in goods and services and in European currency, potentially you become applicable under GDPR.

“It's also about behaviour and profiling as well. Organisations that conduct these activities may need to be compliant, particularly if it's a European citizen.

Martin believes it is important to go back to the actual GDPR articles as there can be too many interpretations of what people think they are. Legal representatives should be able to provide proper guidance.

IBM used its own creation, IBM Watson for Security, to help the company analyse where its data was and to take on board recommendations about what they needed to do to comply with GDPR.

 “IBM sees more than 60 billion security events per day, on average. We're digesting a tremendous amount of unstructured data that can then be analysed. A security analyst may say they've seen an attack but they may not understand its security implications.

“By feeding that into Watson for Security, they can say they've seen a DDoS attack. Watson can say you've been compromised, this is how, this is the impact and here's the recommendation.

“Traditional security is no longer working. The criminals are using technologies such as cutting-edge AI and using it against organisations,” Martin says.

With compliance and regulations rolling out in force, there are plenty of opportunities to use AI to fight back.