Cybersecurity Challenges in Asia

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Despite being the wellspring for cutting-edge technology brands such as Samsung, Sony, and HTC, Asia has proven to be less adept at managing a different sort of technological challenge: cybersecurity threats. A recent Deloitte Consulting white paper identified the “Cyber Five”—the five countries whose economies had the greatest vulnerability to cyber attacks—and all of them are in the Asia-Pacific: South Korea, Australia, New Zealand, Japan, and Singapore.

Experts in the cybersecurity industry can corroborate this statistical study. Bryce Boland, the Chief Technology Officer for Asia at FireEye, a network security consulting firm, explained to the Cipher Brief that firms using FireEye’s services in the Asia-Pacific region see nearly as the global average. Boland went on to say that the cause of the increased attacks is likely rooted in the heightened geopolitical tensions sweeping through the region, combined with the low risk and high reward for governments or private entities to use cyber espionage over traditional means. Boland highlights the fact that Asian firms are less likely to disclose cybersecurity breaches and this works to the detriment of other firms that could learn from the mistake.

Among the Asian countries at greatest risk, South Korea appears to have the greatest cybersecurity challenges. Years ago the government made high-speed internet connectivity a priority, and now with the highest rate of broad band service in the world, South Korea also has the most exposure to attacks. South Korea took the top rank in the two indices used in the Deloitte paper. The first identified Korea as most vulnerable based on internet connectivity rates, point-of-sale terminals, and number of mobile phone subscribers among others.

The second index examined industrial control systems, an issue more worrisome than simple financial fraud. The threat to industrial systems is not an idle one. In 2015, a large energy firm called Korea Hydro, which manages 23 nuclear power plants, was subject to an attack by a spear-phishing virus known as “kimsucky,” which aimed to steal employee data and plant blueprints. Identifying the virus allowed investigators to trace the attack to North Korea’s cyberwarfare division. Between its internet-dependent economic and financial institutions, and its constantly pugnacious and increasingly cyber-capable northern neighbor, South Korea faces a daunting cybersecurity challenge it cannot solve on its own.

Sangbae Kim, a political science professor at Seoul National University, told the Cipher Brief that South Korea must pursue stronger bilateral cooperation with the United States on cyberattacks that threaten national security and pursue multilateral frameworks that involve public-private partnerships: “In the face of increasingly advanced and prevalent hacking technologies, many countries and international organizations are placing a greater focus on devising security measures and enhancing multilateral cooperation to combat cyber threats…” Kim believes that South Korea’s middle-power status and experience with multilateral organizations will make south Korea a key player in forming cybersecurity cooperation frameworks.

Both Kim and Boland agree that collaboration among governments, private companies, or a combination of the two is essential to shoring up the gaps in existing cybersecurity defenses. Private companies have already been proactive about enhancing cooperative efforts. Microsoft recently opened its seventh global Cybersecurity Center (CSC) in Seoul, South Korea. Of the seven of these centers established to date, five are in Asia. The purpose of such centers is to foster public-private partnerships among local businesses, government, and academic organizations in order to pool resources on cybersecurity challenges.

An estimate by Grant Thornton, an accounting advisory firm, placed the cost of cyberattacks to private businesses in Asia at $81 billion in 2015. This was $20 billion more than both North America and the European Union. For countries and companies to mitigate future losses, they will need to increase transparency on when and how breaches happen and pool resources on best practices. If the region can combine collaboration with its technological acumen, it may someday become a leader, rather than a laggard, in cybersecurity.

Will Edwards is an International Producer with The Cipher Brief.