The Committee's recent inquiry into cyber-security was triggered by a series of data breaches at Talk Talk, but the Committee has warned that the problem is significant, growing, and affects all sectors with an on-line platform or service. Ninety per cent of large organisations have reportedly experienced a security breach, and 25% of companies experience a cyber-breach at least once a month.
The public sector fares no better: the latest research from the ICO shows that the health sector has the most data breaches, followed by local government. Furthermore, not all threats to cyber security or data protection are from external actors: over 40% are caused by employees, contractors and third party suppliers, and half of these are accidental.
Company responsibility and consumer rights
The Committee also focused on strengthening consumer rights and awareness of scams, implemented and enforced by a series of new requirements and sanctions on company directors and chief executives, including:
- Companies must report their cyber security and data protection strategies to the ICO
- They should also include these in their annual reports, in the same way as the requirement for environmental and social reporting where material: quadruple bottom line reporting
- It is appropriate for the CEO to lead a crisis response, should a major attack arise, but cyber security should sit with someone able to take full day-to-day responsibility who can be fully sanctioned if the company has not taken sufficient steps to protect itself from a cyber-attack
- To ensure this issue receives sufficient CEO attention before a crisis strikes, a portion of CEO compensation should be linked to effective cyber security
- Companies must make it much easier to verify if communications, whether online or by telephone, are genuine. The ICO’s system of sanctions should include fines for companies that fail to do this
- It should be easier for victims of a data breach to claim compensation
- It is not enough for companies to say they weren’t aware. Breaches are common, and all companies need to plan and test for that eventuality
- Further, they need to demonstrate they have identified and addressed the weaknesses that have led to any data breaches
- The vulnerability of the massive new data pools that will be created by the Investigatory Powers Bill needs to be urgently addressed by Government
- Good cyber practice will need to evolve and develop: this is essential to maintain consumer confidence and Britain’s place as the top internet economy in the G20
- There needs to be a step change in consumer awareness of on-line and telephone scams, and the Government should initiate a public awareness-raising campaign, on a par with its campaign to promote smoke alarm testing
Jesse Norman MP, Chair of the Committee, said:
"Companies must have robust strategies and processes in place, backed by adequate resources and clear lines of accountability, to stay one step ahead in a sophisticated and rapidly evolving environment. Failure to prepare for or learn from cyber-attacks, and failure to inform and protect consumers, must draw sanctions serious enough to act as a real incentive and deterrent.
As the TalkTalk case shows, the reality is that cyber-attacks are a constant, evolving threat. TalkTalk responded quickly and well to this attack, but appear to have been much less effective in the past, failing to learn from repeated breaches of different kinds.
They should now publish as much of the PWC investigation as commercially possible without delay, and set out exactly how they will implement any necessary changes. Everyone must take the lessons from the Talk Talk breaches as a wake-up call – both in how they prepare to prevent cyber-attacks, and in how they deal with their consumers when those attacks occur."