8 November 2005
Media Release
Regulatory compliance surpasses worms and viruses as most important driver of information security
Yet organisations are missing the rare investment opportunities that compliance offers to promote information security
as an integral part of their business, according to Ernst & Young’s 8th annual Global Information Security Survey
Compliance with regulations has taken the lead as the primary driver of information security, for the first time
surpassing worms and viruses, according to a survey released by leading professional services provider Ernst & Young.
The sheer number of regulations and the consequences of not complying with them has escalated information security to
the boardroom. Nearly two-thirds of survey respondents – representing 1,300 global companies, government and non-profit
agencies in 55 nations – cited compliance with regulations such as Sarbanes-Oxley, the EU’s 8th Directive or their
equivalent as the primary driver of information security.
However, organisations are missing the rare investment opportunities that compliance offers to promote information
security as an integral part of their business.
“Compliance is proving to be more of a distraction than a catalyst for information security becoming strategically
aligned within organisations,” says Susan Steedman, Ernst & Young New Zealand’s Director of Enterprise Risk and Improvement Services.
“One might assume that with the attention information security is receiving due to regulatory compliance,
organisations’information security postures are improving and information security as a function is becoming more
integral to their strategic initiatives. Unfortunately, this is not happening on a consistent basis. The gap continues
to widen between the growing risks brought on by rapid changes in the global business environment and what information
security is doing to address those risks. This pattern is consistent across organisations, regardless of size or
location.”
Business demands pushing the adoption of emerging technologies
The Ernst & Young survey found that business demands and the declining cost of wireless connectivity are driving the rapid
widespread adoption of mobile technology. But with these devices leaving the safety of the corporate control
environment, the information assets and intellectual property they carry are increasingly becoming the responsibility of
individuals to protect—a responsibility that many organisations have not yet fully accepted nor anticipated.
“Less than half of organisations make provision for general users of information to be trained or made aware of the
impact of information security issues with these technologies, and fewer still receive training on responding to
security incidents,” Ms Steedman noted.
Other rapidly developing technologies such as voice-over IP telephony, open source, and server virtualization, which
hold the potential of increasing organisations’ competitive advantage are reported to be a significant security concern
among fewer than 20% of organisations, despite the serious threats they bring with them. Organisations consider emerging
technologies in general to be a growing security concern in the next 12 months. However, over a quarter of them have no
plans to take action to address the concern during that time period or beyond.
Third party risk remains an issue
Outsourcing remains an information security threat as many organisations are still not paying adequate attention to
vendor risk management—the process of assessing and mitigating risks, including due diligence and regular reviews of
practices and procedures supporting vendors’ products and services. The survey reveals that one-fifth of respondents do
not address the issue of vendor risk management at all, and one-third report they have only informal procedures in place
to do so.
“It is no longer enough for organisations to consider just their own information security issues and threats,” Ms
Steedman said. “As the world becomes increasingly smaller, and with more and more information flowing between companies,
all organisations need to consider the security of their business partners, outsourcing arrangements, suppliers and
customers. Otherwise, the value created by these arrangements can quickly diminish or disappear due to perceived or real
security, privacy, or identity breaches. Organisations should also consider demonstrating their own commitment to good
information security by applying recognized standards or becoming certified.”
Organizational alignment and execution
Although awareness about information security has risen as a critical issue among boards and executive management, they
continue to focus information security activities on operational and tactical issues at the expense of addressing
strategic concerns.
“With proper organisational alignment and execution, information security can make significant contributions to the
organization’s strategic initiatives and overall risk management,” says Ms Steedman.
“Organisations which employ information security in this way continuously involve business, IT, and information security
leaders in identifying specific areas where information security can contribute to strategic initiatives, such as
mergers and acquisitions and outsourcing of business operations. They apply recognised information security standards,
leading practices and the appropriate resources.”
ENDS
Notes to Editors:
1. An electronic copy of 2005 Ernst & Young Global Information Security Survey is available at http://www.ey.com/globalsecuritysurvey
About Ernst & Young
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