Managing Cyber Risk the Japanese Way

Dr Ruth Taplin, editor of Managing Cyber Risk in the Financial Sector, reveals the surprising reasons behind Japan’s success in guarding against cyber crime.

What do earthquakes and cyber-attack have in common? On first consideration, not much. However, as Ruth Taplin, editor of  Managing Cyber Risk in the Financial Sector, has discovered, the country’s susceptibility to natural disasters has aided the Japanese in responding to the ever-increasing threat of cyber crime.

“They are very prepared for a very simple reason”, Ruth told us. “They are using counter-measures for cyber security purposes based on systems that they set up many, many years ago based on natural catastrophes – the systems that they have in place to warn everybody against tsunamis.”

We all recall the devastation caused by the 2011 Tōhoku earthquake and, more recently, the Kumamoto disaster – both of which not only claimed lives but caused nuclear accidents, yet the country’s financial sector is turning these experiences to its advantage.

Constantly living in threat of such life-altering events, the Japanese are used to being adaptable and remaining alert to potential calamities. The ever-present dangers of volcanic eruptions, earthquakes and tsunamis have compelled them to develop a highly sophisticated system for coping with these conditions.

“They have very advanced systems for warning for natural catastrophes, because it’s a country right on the Ring of Fire, right on the fault lines, the deep trench off of Tokyo – they are ripe for all sorts of natural catastrophes”, Ruth continued.

Their particular strength, Ruth explained, is co-ordinating people and getting everyone to work together: “They’ve decided that the best way to approach uniting people and getting them to work, even in the financial services, banking and insurance, is to build on these liaisons between government, between associations, between customers, between managers, between people who work in these companies, and to use these already interconnected associations to help prevent cyber risk – as well as through education, through training drills that maybe replicate what could happen.”

Just as British children learn what to do in the event of fire through drills, Japanese children are taught how best to protect themselves and others when natural disasters strike through similar simulated exercises. Building on these procedures already in place, the financial sector are able to educate their workers about the methods and motives of cyber criminals, highlight potential security risks, and prepare them to deal with all eventualities.

All this raises the question: what are other countries doing to combat these same pressures, and are they less prepared? The research from  Managing Cyber Risk in the Financial Sector certainly demonstrates that the City of London and the United States are nowhere near cyber ready. However, Ruth emphasises that we must not place the onus of guarding against these hazards solely on each nation’s financial workers – government needs to take responsibility too. Japan’s advantage lies in the participation of its leaders, who are able to provide a myriad of valuable resources and co-ordinate training programmes.

You can read more about trends in cyber crime, along with new methods for counteracting them, in Ruth’s latest book, Managing Cyber Risk in the Financial Sector.

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