Company directors must act over rising cyber attacks, says Telstra Ventures

Companies, like government, must help protect vulnerable Australians against cyber ‘warfare’, says Telstra Ventures.

Cyber attacks have risen 13 per cent in the past year, according to the Australian Cyber Security Centre, costing Australians $33bn.

A rise in “malicious” cyber attacks has been branded a “modern day version of warfare” that is going to require company directors to step into the vanguard to protect health and hospital systems and vulnerable Australians, according to Telstra’s venture capital arm.

Cyber attacks have surged during the Covid-19 pandemic, costing Australians $33bn, according to the Australian Cyber Security Centre, which received 67,500 cyber crime reports in the past year - an increase of 13 per cent on the previous 12 months.

While the federal government has a role to protect Australian businesses and citizens from cyber attacks, it is looking at sharing the burden with company directors who could become personally liable for online hacks and breaches.

And Telstra Ventures has bet more than $US100m ($137m) on more than a dozen cybersecurity start-ups to bolster defences for big business online attacks from criminals and foreign powers increase in volume and scale.

Telstra Ventures partner Marcus Bartram said the days of only installing antivirus software on company computers were over and businesses must take a multi-pronged defence, including protecting their employees, clients and suppliers from attacks.

“Governments need to intervene (in cyber attacks) no matter where they’re from, to try and stem the flow of these issues. I mean, it’s sort of a modern day version of warfare isn’t it?” Mr Bartram said.

“It’s clearly become part of the arsenal of the way countries respond to each other and they learn each other‘s secrets, and it’s sort of like a sophisticated form of spyware and warfare. So governments need to react or respond to that.”

But Mr Bartram said company directors also needed to take accountability for defending against cyber attacks, particularly as the federal government mulls holding them personally liable.

“From a sort of company perspective, the companies that are investing in tools and services aren’t necessarily thinking about, ‘am I being attacked by the government, or am I being attacked by organised crime’.

“Either one can have a devastating effect on the outcome. So you‘ve got to have defences in place.

“Cyber is just another risk. It’s no different to making sure you’ve got adequate physical security controls and you’ve got adequate backups.”

Telstra Ventures — founded in 2011 and spun off two years ago as an independent venture capital fund — has invested in 80 companies, 14 of which are dedicated to cybersecurity. The fund, which is also backed by HarbourVest, one of the world’s largest private equity funds, says combating online warfare will become part of everyday operations for businesses of all sizes.

In total, cyber security investments comprise just under a fifth of Telstra Ventures’ $US560m portfolio, which also includes software and infrastructure. It is a formula that has proven successful, with the fund returning $US190m to investors since 2018.

And demand is set to climb further as the Australian government took the rare step of attributing major cyber attacks to China in a co-ordinated move with key allies in July, accusing Beijing of engaging “contract hackers” to steal intellectual property.

The attacks, utilising vulnerabilities in Microsoft Exchange software, affected thousands of computers and networks across the world, including in Australia.

Home Affairs Minister Karen Andrews said in July she has “very high levels of confidence” that the Chinese Ministry of State Security was behind the attack on Microsoft’s Exchange mail server in January.

While the comments are set to add further strain to Australia’s relationship with China, which in the past 12 months has banned Australian exports ranging from barley and beef to wine and lobster, Ms Andrews said she wouldn’t hesitate to hold the country accountable if it continued to launch cyber attacks.

Meanwhile, the Biden administration said China’s state-sponsored hacking posed a major threat to the interests of the US and its allies.

But The Global Times, the Chinese communist regime’s mouthpiece, dismissed the country being behind a global cyber hacking campaign as a “smear” to China that “only exposes diffidence”.

“The US has accused China of cyber attacks for many years. It has become a highly sensitive issue between China and the US,” The Global Times wrote.

“We have to ask: What is the motive and benefit for China to launch large-scale cyber-attacks against the US and severely hit China-US relations as the US has accused? Which piece of information or economic benefit from the US is more important than China’s national reputation?”