Australian outsourcing provider VAP launches cybersecurity whitepaper identifying five critical blind spots affecting SMEs moving operations offshore.
What’s happening: Australian outsourcing provider VAP has launched a cybersecurity whitepaper revealing critical security gaps affecting SMEs that outsource offshore operations. With 87,000 cyber incidents reported by Australian businesses last year, each costing small businesses an average of $49,600, the research identifies five key blind spots and practical protocols to minimise risk.
Why this matters: More than half of Australian businesses are considering sourcing suppliers or customers from overseas markets within the next year Australian fintech landscape 2024, making cybersecurity oversight critical.
Cybersecurity has evolved from a big business concern to an urgent priority for Australian SMEs, particularly as outsourcing becomes more prevalent.
According to the Australian Government’s Annual Cyber Threat Report, each cybercrime incident costs small businesses an average of $49,600, with 87,000 cyber incidents reported by Australian businesses last year alone.
In response to this growing threat, Australian-owned offshore outsourcing provider VAP has partnered with cybersecurity consultancy The Cyber Collective to launch its inaugural Safe Solutions: Reclaiming Security in Offshore Operations whitepaper.
Brian Jones, CEO of VAP, explains the shifting landscape. “While outsourcing has traditionally been a trend only seen in large corporations, outsourcing has become a lifeline for small to medium-sized businesses looking to improve efficiency, but there are serious cybersecurity blind spots.”
Beyond big business
The context for this security challenge is clear. Faced with mounting operational costs, 51 per cent of Australian businesses are prepared to explore international resources and clientele within the coming year Australian fintech landscape 2024, driven by the relentless pressure of rising operating expenses.
Jones highlights the vulnerability of smaller operators. “Many smaller companies lack the knowledge and resources to properly vet or oversee outsourced workers, and the consequences of a data breach in heavily regulated industries such as finance can be dire.”
Fraser Jack, founder of The Cyber Collective, acknowledges the tension between efficiency and security. “Businesses are concerned with security and data privacy when moving operations overseas. Cybersecurity threats are often seen as a con of offshoring, but with the right procedures, practices and offshoring partners, offshoring can enhance business operations like never before.”
Five critical blind spots
The whitepaper identifies five key areas where Australian business owners frequently fall short when offshoring operations.
First, oversight failures remain common. Too many small businesses make assumptions when offshoring functions, so ensuring there is always someone actively responsible for reviewing offshore risks and monitoring cybersecurity measures is essential.
Second, the work environment requires scrutiny. Offshore teams must work from private spaces with monitored access, robust internet security and verified devices, rather than simply being granted unrestricted access.
Third, cyber awareness within teams can be compromised through behaviours such as informal task delegation, job-sharing and lax attitudes to privacy, making a strong culture around secure behaviours essential.
Fourth, technology must be used and updated consistently. Security technology used by offshore teams must be continually reviewed, updated and reconfigured according to the same standards as onshore operations.
Finally, compliance protocols must be maintained. Policies and procedures must ensure offshore teams comply with regulations and remain accountable, whilst updated documentation demonstrates due diligence to regulators.
Practical protocols
Jones emphasises that security doesn’t require complex solutions. “Implementing simple protocols such as vendor risk assessments as part of the onboarding process, adding enforceable cybersecurity clauses to outsourcing contracts, operating a Zero Trust policy for external network access, and using automated third-party risk monitoring tools are some of the key strategies to minimise risk.”
Jack adds that proper preparation can transform outsourcing from a security risk to an operational advantage. “Working with VA Platinum, we’ve identified some of the most common pitfalls currently affecting Australian business owners when offshoring operations.”
The research arrives as tech-related products and services lead outsourcing priorities, with software at 38 per cent and IT hardware at 31 per cent Australian fintech landscape 2024, reflecting both Australia’s skills shortage in this area and the critical importance of securing these operations.
Jones concludes with a practical message for business owners weighing their options. “Following a few fundamental principles when selecting an outsourced service provider can be all it takes to maximise business efficiency with peace of mind. Your customer data will be kept safe and secure.”
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