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Now for the latest financial news with World Business Report. | :00:00. | :00:17. | |
Businesses make moves to tighten security or face data theft and | :00:18. | :00:19. | |
And as Brazil suffers its worst recession | :00:20. | :00:23. | |
for 25 years what impact will a rise in US interest rates have? | :00:24. | :00:33. | |
Businesses make moves to tighten security or face data theft and | :00:34. | :00:36. | |
And as Brazil suffers its worst recession | :00:37. | :00:40. | |
for 25 years what impact will a rise in US interest rates have? | :00:41. | :00:43. | |
Welcome to World Business Report I'm Sally Bundock. | :00:44. | :00:45. | |
Also in the programme Australia warns its budget deficit will swell | :00:46. | :00:48. | |
by an extra $2.3 billion due plunging commodity prices. | :00:49. | :00:50. | |
2015 has seen a series of high level global cyber security | :00:51. | :00:59. | |
attacks on businesses, so much so that later today British politicians | :01:00. | :01:02. | |
will debate solutions with some high profile Chief Executives. | :01:03. | :01:13. | |
The urgent message to protect against cyber vulnerabilities has | :01:14. | :01:16. | |
But now there is a shift towards the need to tighten security or | :01:17. | :01:20. | |
face data theft and potential financial embarrassment. | :01:21. | :01:22. | |
For example in October phone company, Talk Talk, | :01:23. | :01:24. | |
It lost valuable customer data and business reputation. | :01:25. | :01:27. | |
Hackers accessed personal details of almost 157 thousand customers, | :01:28. | :01:30. | |
including more than 15,000 bank account numbers and sort codes. | :01:31. | :01:43. | |
And they're not the only ones - Paypal, eBay, JP Morgan and Sony | :01:44. | :01:46. | |
Globally, the cost of hacking is on average | :01:47. | :01:50. | |
In the UK alone its estimated that hacking costs firms a total | :01:51. | :02:03. | |
27 billion of that is lost revenues as the | :02:04. | :02:10. | |
result of attacks with the other $24 billion spent on firms defending | :02:11. | :02:13. | |
Mark Brown is Executive Director of Cyber Security at EY UK. | :02:14. | :02:23. | |
Nice to see you. Tell us a bit more about today's Summit. It has been a | :02:24. | :02:35. | |
long time coming in many respects. The UK government is looking at the | :02:36. | :02:41. | |
issue. Businesses are starting to recognise it is not just a | :02:42. | :02:47. | |
technology issue. It has been pushed out by the UK government for the | :02:48. | :02:53. | |
last few years, to raise awareness among executive management, so they | :02:54. | :02:58. | |
cannot just of all this down to technology. -- push this down to | :02:59. | :03:07. | |
technology. They need to look at what is being done. And what needs | :03:08. | :03:12. | |
to be done, given the EU thinks needs to be done, there is a bit of | :03:13. | :03:17. | |
friction with how it is. With and what happens when companies are | :03:18. | :03:24. | |
hacked? There is a legislative question coming from the EU. The | :03:25. | :03:30. | |
European general day to privacy recommendations. -- data. Businesses | :03:31. | :03:41. | |
have, for a long time, probably we are only looking at the tip of the | :03:42. | :03:48. | |
iceberg with what we are searing it makes | :03:49. | :03:54. | |
it will bring, for the first time, real finding power is to | :03:55. | :04:04. | |
regulators. Companies, is 5000 or more customers are that by cyber | :04:05. | :04:10. | |
hacking, the company will have to divulge that publicly and could face | :04:11. | :04:15. | |
potential fines if the EU directive is implemented? Yes. The position | :04:16. | :04:22. | |
from Europe is that national governments will have to implement | :04:23. | :04:28. | |
this. We expect by late 2018 the government will introduce this | :04:29. | :04:35. | |
international statute. It will be a change to traditional approaches in | :04:36. | :04:41. | |
the UK to empower regulators to take punitive action on businesses. In | :04:42. | :04:48. | |
terms of how prepared companies are globally to see how prepared they | :04:49. | :04:54. | |
are, how prepared are they? We as consumers and customers always worry | :04:55. | :05:01. | |
about where our data will end up. Our clients are telling us that most | :05:02. | :05:08. | |
of them are not prepared. We conduct an annual survey, and this year's | :05:09. | :05:15. | |
report issued that 80% of organisations felt their security | :05:16. | :05:17. | |
function was not meeting the needs of the business. Just under 50% did | :05:18. | :05:25. | |
not have the required functions to manage cyber security. Just over a | :05:26. | :05:29. | |
third of organisations felt they would not know it if a certain | :05:30. | :05:33. | |
breach was happening. Those are quite scary. Thank you. Perhaps some | :05:34. | :05:42. | |
EU fines might change some of that. Any news coming out of that meeting | :05:43. | :05:46. | |
today with chief executives and the UK government on such security, we | :05:47. | :05:48. | |
will update you. As the US prepares itself | :05:49. | :05:51. | |
for potentially its first interest raise since 2008 | :05:52. | :05:52. | |
- not everyone is cheering. For the past seven years, | :05:53. | :05:55. | |
investors seeking high returns placed a lot of their capital | :05:56. | :05:57. | |
in emerging economies like Brazil, which offered good returns but | :05:58. | :06:00. | |
at considerably high risks. If rates go up in the US, | :06:01. | :06:02. | |
there's incentive to get money out of emerging markets | :06:03. | :06:06. | |
which could impact places like Brazil, which is already suffering | :06:07. | :06:08. | |
its worst recession in 25 years. The BBC's South America Business | :06:09. | :06:19. | |
correspondent Daniel Gallas reports Brazil's economy enjoyed the best | :06:20. | :06:33. | |
seven years of low interest rates in the United States, during most of | :06:34. | :06:38. | |
that period there was an increase in foreign capital from the United | :06:39. | :06:43. | |
States into emerging markets. Brazil had solid growth and received | :06:44. | :06:50. | |
investment grades from credit ratings agencies. But now they could | :06:51. | :06:56. | |
be some trouble in Brazil. The country is already facing its worst | :06:57. | :07:05. | |
recession in two decades with a, -- reduction in commodity prices. The | :07:06. | :07:10. | |
decision from the Federal reserve is not helping. Brazil needs any help | :07:11. | :07:19. | |
it can get from markets abroad. Some believe the Brazilian currency has | :07:20. | :07:22. | |
devalued already and there is not much time the Federal reserve could | :07:23. | :07:31. | |
do. -- harm. Borrowing costs could rise in Brazil and less capital is | :07:32. | :07:34. | |
not good news for a country that needs a lot of help right now. | :07:35. | :07:37. | |
The Australian government has forecast its budget deficit will | :07:38. | :07:40. | |
swell to more than $27 billion in the year to June. | :07:41. | :07:42. | |
It's largely being blamed on falling prices for its resource exports. | :07:43. | :07:45. | |
Despite this, the government is planning to come up with a way to | :07:46. | :07:49. | |
pay for its $800 million initiative to inspire a bolder entrepreneurial | :07:50. | :07:58. | |
People are Australia's greatest resource. The Prime Minister, | :07:59. | :08:16. | |
Malcolm Turnbull, believes future prosperity will depend on their | :08:17. | :08:21. | |
ideas and their ability to innovate. The long-running mining boom he | :08:22. | :08:27. | |
continues to fade. Making Australia's freight network move | :08:28. | :08:32. | |
more efficiently is the driving force behind the new start-up from a | :08:33. | :08:41. | |
mathematician. She is now helping firms buy and sell spare capacity. | :08:42. | :08:45. | |
She is excited by the Prime Minister's plans. We are on the cusp | :08:46. | :08:51. | |
of a huge social change. It is going to be so much better for so many | :08:52. | :08:57. | |
more people. You are building a far more sustainable and exciting | :08:58. | :09:01. | |
culture, I think. Innovation is one of our strengths. But some | :09:02. | :09:07. | |
established companies believe Australia still has some way to go | :09:08. | :09:13. | |
to create a smarter economy. This engineering firm in Sydney exports | :09:14. | :09:19. | |
computer-controlled machines that craft industrial textiles. The | :09:20. | :09:22. | |
managing director says he is often frustrated with the government, | :09:23. | :09:26. | |
which needs to do more to promote the spirit of creativity. We have a | :09:27. | :09:30. | |
culture of innovation in Australia, but we do not have a culture of | :09:31. | :09:35. | |
funding innovation. We are going to have a hard time, I would say. We | :09:36. | :09:41. | |
have to go through a period where there are not enough people thinking | :09:42. | :09:45. | |
innovatively, not enough people going into engineering and science. | :09:46. | :09:51. | |
To become an increasingly clever country, Australia wants to harness | :09:52. | :09:54. | |
the brainpower of foreigners. Those with bright ideas for start-ups will | :09:55. | :09:58. | |
be given the chance to live here permanently and be a part of an | :09:59. | :10:01. | |
innovation revolution. Police forces are on the verge | :10:02. | :10:07. | |
of being overwhelmed by a surge in reports of domestic violence, | :10:08. | :10:21. | |
according to the police watchdog It comes as three-quarters | :10:22. | :10:25. | |
of police forces are judged by the | :10:26. | :10:29. |