Report on the state of financial services breaches in Australia

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It has been six months since the new mandatory breach reporting requirements were implemented in Australia on October 1, 2021 across the financial services and insurance industry.

Legal Technology Company Lawcadiaand Gardens, a national firm with a strong practice in financial services regulation, found it critical to understand the ramifications of the new breach reporting requirements for legal, risk management and compliance teams. Therefore, in January 2022, they commissioned CoreData Research, an independent research partner, to conduct a cutting-edge research study to understand the key challenges, potential benefits, and how the industry has welcomed the new regime.

The research took place between March and April 2022 with surveys of 160 financial services organizations in Australia. Additionally, in-depth interviews with senior risk and regulatory compliance professionals were conducted to uncover additional qualitative insights.

Research findings and insights will be published in the first Report on the state of financial services breaches in Australia‘ on April 28, 2022.

The research reveals how the impact of breach reporting obligations has rippled across financial services organizations.

Initially, a large increase in workload occurred as organizations assimilated the content of their new obligations, developed implementation plans, and developed internal policies and procedures.

A significantly increased workload has continued following the entry into force of the new rules, as organizations grapple with the tasks of identifying incidents and then investigating and evaluating those incidents to determine if they should be reported in a short period of time.

The research shed light on several key statistics about breach reporting and significant challenges faced by AFS and AC licensees –

53% of respondents cite the complexity of the new rules as a source of challenges.

55% say the breach reporting regime has increased their organization’s compliance spend.

51% of respondents said they were not confident ASIC could administer the new regime effectively and fairly.

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