1 00:00:04,019 --> 00:00:06,480 Sean Aylmer: Welcome to the Fear and Greed Business Interview. I'm Sean 2 00:00:06,480 --> 00:00:09,599 Sean Aylmer: Aylmer. One of the great lessons from the COVID period 3 00:00:09,990 --> 00:00:12,568 Sean Aylmer: is that supply chains matter. Those in business always knew 4 00:00:12,570 --> 00:00:14,849 Sean Aylmer: it, but now the rest of us appreciate just how 5 00:00:14,849 --> 00:00:18,569 Sean Aylmer: important raw materials and manufacturing, technology, shipping, transport, all those 6 00:00:18,600 --> 00:00:22,168 Sean Aylmer: sorts of things are to our everyday lives. While COVID 7 00:00:22,170 --> 00:00:24,870 Sean Aylmer: is no longer a threat to supply chains, the interdependence 8 00:00:24,870 --> 00:00:29,010 Sean Aylmer: of our economy means supply chains remain fragile, particularly given 9 00:00:29,010 --> 00:00:33,630 Sean Aylmer: the fractious geopolitical environment. McGrathNicol, a great sponsor of the 10 00:00:33,630 --> 00:00:36,360 Sean Aylmer: Fear and Greed podcast, has just released a survey of 11 00:00:36,360 --> 00:00:40,560 Sean Aylmer: business leaders' attitudes towards key threats to their businesses. It's 12 00:00:40,560 --> 00:00:44,549 Sean Aylmer: called Uncovering Risks in the Supply Chain. And here to 13 00:00:44,550 --> 00:00:47,489 Sean Aylmer: talk to me this morning are Matt Fehon and Sam Boarder, 14 00:00:47,490 --> 00:00:52,109 Sean Aylmer: both partners at McGrathNicol Advisory. Matt, Sam, welcome to Fear 15 00:00:52,109 --> 00:00:52,199 Sean Aylmer: and Greed. 16 00:00:52,199 --> 00:00:52,529 Matt Fehon: Hi Sean. 17 00:00:52,769 --> 00:00:54,629 Sam Boarder: Hi Sean. Thanks for having us. 18 00:00:55,109 --> 00:00:58,410 Sean Aylmer: Okay. So Matt, starting with you, 97% of Aussie business 19 00:00:58,410 --> 00:01:02,340 Sean Aylmer: leaders are very or somewhat confident in their ability to 20 00:01:02,340 --> 00:01:06,480 Sean Aylmer: navigate future potential risks to their supply chain. Is that 21 00:01:06,480 --> 00:01:09,990 Sean Aylmer: a good thing or is it complacency? I mean, that's 22 00:01:09,990 --> 00:01:10,979 Sean Aylmer: an incredibly high number. 23 00:01:11,670 --> 00:01:14,459 Matt Fehon: I think from my perspective, the results weren't that surprising 24 00:01:14,459 --> 00:01:17,490 Matt Fehon: really. In conducting the survey, we engaged with YouGov and 25 00:01:17,490 --> 00:01:21,120 Matt Fehon: surveyed 300 executive across a range of industries. This included 26 00:01:21,480 --> 00:01:25,440 Matt Fehon: board members and senior executives, and those senior executives held 27 00:01:25,440 --> 00:01:27,208 Matt Fehon: a variety of roles. So it was a good cross- 28 00:01:27,209 --> 00:01:30,569 Matt Fehon: section. But. I think the reason I say it wasn't 29 00:01:30,750 --> 00:01:33,750 Matt Fehon: surprising, for the last five or six years, we've been 30 00:01:33,990 --> 00:01:38,250 Matt Fehon: challenging executives to think differently about their supply chain risks. 31 00:01:38,760 --> 00:01:43,829 Matt Fehon: The majority do think about what's the impact to their 32 00:01:43,830 --> 00:01:48,540 Matt Fehon: financial performance, but they don't assess the real impact on the non- 33 00:01:48,540 --> 00:01:52,620 Matt Fehon: financial risks that are presented through supply chains. I think 34 00:01:52,620 --> 00:01:55,980 Matt Fehon: many executives rely on a supply chain manager or a commercial 35 00:01:56,070 --> 00:02:00,480 Matt Fehon: manager that is responsible for supply chain, and they might think 36 00:02:00,480 --> 00:02:03,389 Matt Fehon: it's all hunky dory having someone or a resource in 37 00:02:03,389 --> 00:02:06,630 Matt Fehon: place. But I think that person also needs to move 38 00:02:06,630 --> 00:02:09,690 Matt Fehon: with the times and model what the potential scenarios might 39 00:02:09,690 --> 00:02:12,000 Matt Fehon: be that could result in unexpected events. 40 00:02:12,630 --> 00:02:14,279 Sean Aylmer: So Matt, it's a really good point. I mean, your 41 00:02:14,280 --> 00:02:17,250 Sean Aylmer: survey covers off all sorts of things... cyber attacks, legal 42 00:02:17,250 --> 00:02:21,479 Sean Aylmer: and regulatory changes, operational risks, counterparty risks, et cetera, even 43 00:02:21,480 --> 00:02:25,410 Sean Aylmer: geopolitical threats. What you just said, you have a supply 44 00:02:25,410 --> 00:02:28,290 Sean Aylmer: chain manager in place, fantastic. But it actually has to 45 00:02:28,290 --> 00:02:30,419 Sean Aylmer: be much more than that. It has to go to 46 00:02:30,419 --> 00:02:33,510 Sean Aylmer: executive and board level. What would your advice be to 47 00:02:33,510 --> 00:02:37,530 Sean Aylmer: companies and their boards that I suppose don't know where 48 00:02:37,530 --> 00:02:39,359 Sean Aylmer: to start? They know they've got a supply chain manager, 49 00:02:39,360 --> 00:02:42,179 Sean Aylmer: but they know they need to do more. What should they do? 50 00:02:42,180 --> 00:02:43,080 Sean Aylmer: What's the step one? 51 00:02:44,100 --> 00:02:47,190 Matt Fehon: The first thing, I think organizations or executives need to 52 00:02:47,220 --> 00:02:50,220 Matt Fehon: just acknowledge they've probably taken away a bit of confidence 53 00:02:50,760 --> 00:02:53,849 Matt Fehon: from the COVID experience where everyone had to adapt, Sean, 54 00:02:53,849 --> 00:02:57,239 Matt Fehon: and as you know, learn quickly as to the disruptions 55 00:02:57,240 --> 00:03:00,449 Matt Fehon: in their supply chain. But what I don't think they've 56 00:03:00,570 --> 00:03:03,840 Matt Fehon: done is moved with the broader geopolitical risks that you 57 00:03:04,080 --> 00:03:07,290 Matt Fehon: just touched on. No one thought we'd be experiencing the 58 00:03:07,290 --> 00:03:10,230 Matt Fehon: conflicts that we're seeing in Ukraine, and more recently Gaza, of 59 00:03:10,230 --> 00:03:14,219 Matt Fehon: course. And this then brings into what we say is 60 00:03:14,219 --> 00:03:17,609 Matt Fehon: really important, the security threats that are present within the 61 00:03:17,609 --> 00:03:21,120 Matt Fehon: supply chain. I think cyber's a very good example, if 62 00:03:21,120 --> 00:03:22,889 Matt Fehon: we can just touch on that. For a long time 63 00:03:23,280 --> 00:03:26,159 Matt Fehon: where we saw complacency over the last decade, in the 64 00:03:26,160 --> 00:03:29,700 Matt Fehon: early stages of the last decade, in my experience in 65 00:03:29,700 --> 00:03:31,950 Matt Fehon: the work that I've done for many years, we saw 66 00:03:31,950 --> 00:03:36,690 Matt Fehon: complacency around cyber in many businesses until we saw ransomware 67 00:03:36,690 --> 00:03:40,470 Matt Fehon: and data breaches and big data breaches and how that 68 00:03:40,470 --> 00:03:44,220 Matt Fehon: impacts a company or a business and then ultimately how 69 00:03:44,220 --> 00:03:46,950 Matt Fehon: that plays out in the supply chain, whether it was 70 00:03:46,950 --> 00:03:50,490 Matt Fehon: the company that was attacked or one of their suppliers, 71 00:03:50,520 --> 00:03:52,589 Matt Fehon: and it then had that consequential effect. 72 00:03:53,219 --> 00:03:56,340 Sean Aylmer: So if I'm a manager or on a board and 73 00:03:56,340 --> 00:04:00,240 Sean Aylmer: I'm thinking about the big challenges, cyber is obviously one 74 00:04:00,240 --> 00:04:01,920 Sean Aylmer: of the big ones. What are the other big ones 75 00:04:01,920 --> 00:04:02,910 Sean Aylmer: I should be thinking about? 76 00:04:03,540 --> 00:04:06,659 Matt Fehon: Well, I think if we look at your supply chain, 77 00:04:06,870 --> 00:04:09,539 Matt Fehon: the first thing is always, and the survey showed this, 78 00:04:09,540 --> 00:04:13,170 Matt Fehon: 57% of respondents said financial risk is still the number 79 00:04:13,170 --> 00:04:16,589 Matt Fehon: one risk that they assess. But behind the financial risks, 80 00:04:16,589 --> 00:04:19,650 Matt Fehon: you've got these secondary risks such as cyber, counterparty risk, 81 00:04:19,980 --> 00:04:22,469 Matt Fehon: and I think proper due diligence. I've been a forensic 82 00:04:22,469 --> 00:04:26,279 Matt Fehon: accountant for 30 years now, and I must say most 83 00:04:26,279 --> 00:04:29,309 Matt Fehon: investigations that we do and the range of issues that 84 00:04:29,309 --> 00:04:32,700 Matt Fehon: we confront generally go down to a lack of knowing 85 00:04:32,790 --> 00:04:35,849 Matt Fehon: the individual or the entity that you're doing business with. 86 00:04:36,600 --> 00:04:39,270 Matt Fehon: And then I think the other risk, which everyone needs 87 00:04:39,270 --> 00:04:42,210 Matt Fehon: to be aware, is regulatory risks. And I think the 88 00:04:42,210 --> 00:04:44,339 Matt Fehon: best example of that is sanctions. And we're starting to 89 00:04:44,339 --> 00:04:48,419 Matt Fehon: see sanctions that were imposed on Russia, Russian companies, et 90 00:04:48,450 --> 00:04:53,849 Matt Fehon: cetera. But with other now geopolitical events, and particularly in 91 00:04:53,850 --> 00:04:57,840 Matt Fehon: our region through Southeast Asia, should there be further sanctions 92 00:04:57,928 --> 00:05:03,480 Matt Fehon: imposed, organizations need to consider how that may impact supply 93 00:05:03,480 --> 00:05:07,500 Matt Fehon: chain and just supply through our usual trade routes. 94 00:05:08,070 --> 00:05:10,469 Sean Aylmer: Okay. Sam, I might bring you in on that particular 95 00:05:10,470 --> 00:05:14,909 Sean Aylmer: point. How do you think Australian businesses and their supply chains 96 00:05:14,940 --> 00:05:18,960 Sean Aylmer: could potentially be affected by the conflicts or the geopolitical 97 00:05:18,960 --> 00:05:23,219 Sean Aylmer: tension we're talking about, be that Ukraine, Russia, or the 98 00:05:23,219 --> 00:05:27,150 Sean Aylmer: Middle East, which seem far away in some senses, or 99 00:05:27,150 --> 00:05:30,690 Sean Aylmer: what's happening in our region in the Asia Pacific region 100 00:05:30,690 --> 00:05:31,620 Sean Aylmer: and then further north? 101 00:05:32,309 --> 00:05:34,500 Sam Boarder: Well, I think to start with, it's very hard to 102 00:05:34,500 --> 00:05:39,120 Sam Boarder: predict as these complex situations often are, but all assessments 103 00:05:39,120 --> 00:05:41,820 Sam Boarder: are indicating that things will likely get worse before they 104 00:05:41,820 --> 00:05:45,479 Sam Boarder: get better, to be a pessimist. But one thing we 105 00:05:45,480 --> 00:05:47,760 Sam Boarder: are looking for at the moment is whether the Israel- 106 00:05:47,760 --> 00:05:51,690 Sam Boarder: Hamas conflict becomes the catalyst for broader volatility, obviously in 107 00:05:51,690 --> 00:05:54,270 Sam Boarder: the Middle East in the first instance, but even potentially 108 00:05:54,270 --> 00:05:56,910 Sam Boarder: even mark the beginning of a new era of proxy 109 00:05:56,910 --> 00:06:00,000 Sam Boarder: conflicts with all of the geopolitical risks that would bring 110 00:06:00,059 --> 00:06:02,820 Sam Boarder: with it. So that's the worst case scenario. But there 111 00:06:02,820 --> 00:06:07,260 Sam Boarder: are two certainties, which I'll speak to now. One is 112 00:06:07,260 --> 00:06:10,770 Sam Boarder: that the baseline level of existing geopolitical risk to businesses is 113 00:06:10,770 --> 00:06:14,129 Sam Boarder: going to increase. That's a given. And the second is 114 00:06:14,130 --> 00:06:18,630 Sam Boarder: just around uncertainty and the fact that in the past, 115 00:06:18,720 --> 00:06:22,110 Sam Boarder: sudden and rapid escalation in these types of events is 116 00:06:22,110 --> 00:06:24,210 Sam Boarder: likely to have an impact on supply chains in the 117 00:06:24,210 --> 00:06:27,360 Sam Boarder: region, and there is always a cost factor associated with 118 00:06:27,360 --> 00:06:30,450 Sam Boarder: that uncertainty. So the trend that we've been observing over 119 00:06:30,450 --> 00:06:33,779 Sam Boarder: at least the last three years, particularly during COVID, is 120 00:06:33,779 --> 00:06:37,020 Sam Boarder: that Australia's geopolitical environment is becoming more contested and it's 121 00:06:37,020 --> 00:06:40,320 Sam Boarder: becoming more hostile. And this trend's being driven by a 122 00:06:40,320 --> 00:06:43,830 Sam Boarder: few things, but largely it's being driven by strategic competition 123 00:06:43,830 --> 00:06:48,270 Sam Boarder: between the US- led West and an increasingly assertive authoritarian 124 00:06:48,270 --> 00:06:51,900 Sam Boarder: block that's being led by China, Russia, and Iran. So 125 00:06:51,900 --> 00:06:54,539 Sam Boarder: the Israel- Hamas conflict that we're seeing play out at the 126 00:06:54,539 --> 00:06:57,719 Sam Boarder: moment has the potential to become the latest epicenter of 127 00:06:57,720 --> 00:06:59,640 Sam Boarder: that broader competition, if you like. 128 00:07:00,630 --> 00:07:02,820 Sean Aylmer: Stay with me, Matt and Sam. We will be back 129 00:07:02,820 --> 00:07:11,520 Sean Aylmer: in a minute. My guests today are Matt Fehon and Sam 130 00:07:11,520 --> 00:07:16,020 Sean Aylmer: Boarder, partners at McGrathNicol Advisory. In Australia at the moment, 131 00:07:16,050 --> 00:07:19,320 Sean Aylmer: we have our prime minister having spoken to Joe Biden, 132 00:07:19,380 --> 00:07:23,520 Sean Aylmer: about to speak to Xi Jinping. We've played I wouldn't 133 00:07:23,520 --> 00:07:27,840 Sean Aylmer: say quite pivotal, but certainly our geography and our resource 134 00:07:27,900 --> 00:07:32,970 Sean Aylmer: background, we matter nowadays. Is that a good or a 135 00:07:32,970 --> 00:07:37,500 Sean Aylmer: bad thing in terms of local businesses dealing with, again, 136 00:07:37,800 --> 00:07:40,830 Sean Aylmer: I don't like to say sides, but different parts of the geosphere? 137 00:07:42,000 --> 00:07:44,609 Sam Boarder: Yeah, I think it's interesting, Sean, because there's been a 138 00:07:44,610 --> 00:07:48,750 Sam Boarder: Thor obviously in relations between Australia and China over the last bit. And 139 00:07:48,750 --> 00:07:51,570 Sam Boarder: if we go back into the COVID years, we had bans 140 00:07:51,570 --> 00:07:54,300 Sam Boarder: on lobster and we had bans on Bali, and I 141 00:07:54,300 --> 00:07:59,699 Sam Boarder: think maybe we'd been quite I'll say shouty particularly towards 142 00:07:59,700 --> 00:08:03,989 Sam Boarder: China, and they'd responded to what they were perceiving as 143 00:08:03,990 --> 00:08:07,440 Sam Boarder: us perceiving them as a threat. Now, there's multiple layers 144 00:08:07,440 --> 00:08:10,290 Sam Boarder: to this. One of them is that with the change 145 00:08:10,290 --> 00:08:12,510 Sam Boarder: in government, a new tack has been taken, if you 146 00:08:12,510 --> 00:08:15,270 Sam Boarder: like, and the Chinese are, I think, at pains to 147 00:08:15,570 --> 00:08:18,300 Sam Boarder: reward that in some way. And so they've opened up 148 00:08:18,330 --> 00:08:20,100 Sam Boarder: in a way that they hadn't for the last government. 149 00:08:20,670 --> 00:08:22,169 Sam Boarder: One thing I would say though is I think it 150 00:08:22,170 --> 00:08:25,140 Sam Boarder: would be a mistake to misread that, that we're going to 151 00:08:25,140 --> 00:08:27,630 Sam Boarder: go back to what we had in terms of relationship, 152 00:08:27,840 --> 00:08:32,040 Sam Boarder: particularly a trade relationship, prior to the ban on Huawei, 153 00:08:32,040 --> 00:08:34,949 Sam Boarder: for example, in the 5G network back in say 2018. 154 00:08:34,950 --> 00:08:38,880 Sam Boarder: I think we'd seen a steady deterioration and maybe an 155 00:08:38,880 --> 00:08:44,040 Sam Boarder: increasing perception from the Australians in that the military buildup 156 00:08:44,040 --> 00:08:45,780 Sam Boarder: that we were seeing from China and some of this 157 00:08:45,780 --> 00:08:48,900 Sam Boarder: expansionist behaviors and aggression that we were seeing in the 158 00:08:48,900 --> 00:08:52,530 Sam Boarder: South China Sea, that was a potential threat to, well, 159 00:08:52,860 --> 00:08:55,949 Sam Boarder: firstly to supply chains, but directly to Australia. So I 160 00:08:55,950 --> 00:08:59,519 Sam Boarder: think we probably now have accesses to the Chinese side 161 00:08:59,580 --> 00:09:02,190 Sam Boarder: that the US don't have. The US haven't had that 162 00:09:02,700 --> 00:09:04,708 Sam Boarder: Thor in the relations that we've had, but I think 163 00:09:04,710 --> 00:09:06,809 Sam Boarder: it would be a mistake to see it as a return 164 00:09:06,809 --> 00:09:10,200 Sam Boarder: to the previous type of relationship that we had with China. 165 00:09:10,590 --> 00:09:13,348 Sean Aylmer: Just before we leave this geopolitical discussion, Sam, do you 166 00:09:13,349 --> 00:09:17,129 Sean Aylmer: think that agents will use the Russia, Ukraine, Middle East 167 00:09:17,129 --> 00:09:21,179 Sean Aylmer: conflicts as cover to launch cyber attacks on Australian businesses? 168 00:09:21,750 --> 00:09:24,718 Sam Boarder: Yeah. Well, the first point to make here, Sean, is 169 00:09:24,720 --> 00:09:27,510 Sam Boarder: that many of the more advanced cyber threat actors are 170 00:09:27,510 --> 00:09:30,900 Sam Boarder: based inside Russia, China, and Iran. So what that means 171 00:09:30,900 --> 00:09:33,359 Sam Boarder: is that many of the most active and capable cyber 172 00:09:33,690 --> 00:09:37,050 Sam Boarder: criminal groups, they're either sanctioned or they're actively working with 173 00:09:37,050 --> 00:09:40,770 Sam Boarder: the regimes in those countries. So while the ultimate goal 174 00:09:41,010 --> 00:09:44,370 Sam Boarder: is financial, and obviously they're in it to make money, attacks 175 00:09:44,370 --> 00:09:47,639 Sam Boarder: against Western companies and governments serve both purposes. It gets 176 00:09:47,639 --> 00:09:50,399 Sam Boarder: them to cash and it also creates disruption in the 177 00:09:50,400 --> 00:09:53,458 Sam Boarder: country or the company that they're targeting. So I've actually 178 00:09:53,458 --> 00:09:55,890 Sam Boarder: heard it said recently that there's been a drop off, 179 00:09:55,890 --> 00:09:59,250 Sam Boarder: an apparent drop off, in larger ransomware events over the recent 180 00:09:59,250 --> 00:10:02,939 Sam Boarder: past. And I've heard it posited that one of the 181 00:10:02,940 --> 00:10:04,828 Sam Boarder: reasons for that is because the bulk of the best 182 00:10:04,830 --> 00:10:08,759 Sam Boarder: Russian hackers are busy providing cyber support to Russia against 183 00:10:08,759 --> 00:10:11,940 Sam Boarder: Ukraine in the Ukraine War. So I think the second 184 00:10:12,029 --> 00:10:15,720 Sam Boarder: part of your question, Australia's a really wealthy country, and that 185 00:10:16,110 --> 00:10:20,040 Sam Boarder: obviously presents opportunity into what is a billions if not 186 00:10:20,040 --> 00:10:24,000 Sam Boarder: trillions of dollars a year ransomware industry. And one thing 187 00:10:24,000 --> 00:10:26,639 Sam Boarder: on that is that I think Australia's cyber defenses are 188 00:10:26,639 --> 00:10:29,789 Sam Boarder: getting better, and I think we're doing pretty well. We're 189 00:10:29,789 --> 00:10:33,210 Sam Boarder: coming up quickly. And so what that means is that 190 00:10:33,330 --> 00:10:35,370 Sam Boarder: what we're seeing is that cyber threat actors then just 191 00:10:35,370 --> 00:10:39,389 Sam Boarder: adapt their behavior to evade those defenses. So as we 192 00:10:39,389 --> 00:10:43,110 Sam Boarder: better protect our systems, those malicious threat actors, and particularly 193 00:10:43,110 --> 00:10:46,020 Sam Boarder: those that are getting state- sponsored support, they're just shifting 194 00:10:46,020 --> 00:10:49,650 Sam Boarder: their tactics to other collection vectors and looking for easier 195 00:10:49,650 --> 00:10:52,320 Sam Boarder: ways to get access. And one of the ways that we're 196 00:10:52,410 --> 00:10:55,830 Sam Boarder: seeing them get that access is by exploiting individuals, so 197 00:10:55,830 --> 00:10:59,939 Sam Boarder: trusted insiders, employees who have privileged access. Basically they're going 198 00:10:59,940 --> 00:11:02,070 Sam Boarder: around the defenses and they're going directly to someone who's 199 00:11:02,070 --> 00:11:03,000 Sam Boarder: sitting at a desk. 200 00:11:04,080 --> 00:11:09,030 Sean Aylmer: Matt, looking at the McGrathNicol YouGov survey, what to you is 201 00:11:09,030 --> 00:11:12,540 Sean Aylmer: the key takeaway? The people who are listening to this 202 00:11:12,540 --> 00:11:15,210 Sean Aylmer: podcast, what is it that you want them to leave 203 00:11:15,210 --> 00:11:16,590 Sean Aylmer: this discussion thinking about? 204 00:11:17,639 --> 00:11:19,290 Matt Fehon: There's a couple of things. I think from the survey 205 00:11:19,290 --> 00:11:24,358 Matt Fehon: itself and what the senior executives had indicated, I think 206 00:11:24,359 --> 00:11:29,610 Matt Fehon: it was 75% of the executives said they faced challenges 207 00:11:30,059 --> 00:11:34,680 Matt Fehon: in dealing with supply chain risks and in actually addressing 208 00:11:35,040 --> 00:11:39,059 Matt Fehon: the risks in the business. And then alarmingly for me, 209 00:11:39,059 --> 00:11:43,348 Matt Fehon: it's then, I think it was 27% of the organizations 210 00:11:43,440 --> 00:11:47,790 Matt Fehon: have said that they failed to update their risk management 211 00:11:47,790 --> 00:11:53,159 Matt Fehon: plans for supply chain. So whilst they're struggling to address 212 00:11:53,160 --> 00:11:56,429 Matt Fehon: it, there's also a lack of willingness or accountability to 213 00:11:56,429 --> 00:12:00,090 Matt Fehon: address that. I think coming out of it, we've got 214 00:12:00,090 --> 00:12:02,819 Matt Fehon: business leaders and business leaders are very attuned to dealing 215 00:12:02,820 --> 00:12:06,630 Matt Fehon: with and addressing and following certain information such as economic 216 00:12:06,630 --> 00:12:10,949 Matt Fehon: conditions, inflation, interest rates, costs of and probably the shortage 217 00:12:11,400 --> 00:12:13,949 Matt Fehon: of labor, and that's driving a lot of business focus 218 00:12:14,309 --> 00:12:16,559 Matt Fehon: and a lot of business decisions. But cyber, as I've 219 00:12:16,559 --> 00:12:19,650 Matt Fehon: touched on earlier, it has risen up the risk register. 220 00:12:20,040 --> 00:12:23,848 Matt Fehon: And businesses are now alert. Board members are now alert. 221 00:12:24,150 --> 00:12:28,830 Matt Fehon: The company directors are very alert to cyber risk. So 222 00:12:29,099 --> 00:12:32,190 Matt Fehon: I think when we look at the next 12 months 223 00:12:32,190 --> 00:12:34,169 Matt Fehon: or so, I do think we will see change, but 224 00:12:34,170 --> 00:12:37,860 Matt Fehon: we won't see dramatic change given the economic conditions. But 225 00:12:37,860 --> 00:12:40,620 Matt Fehon: what I do advise business leaders to do is devote 226 00:12:40,620 --> 00:12:46,139 Matt Fehon: more time to understanding geopolitical and security risks. So security 227 00:12:46,139 --> 00:12:50,070 Matt Fehon: risk traditionally was physical security, and that's how I think 228 00:12:50,070 --> 00:12:53,458 Matt Fehon: many executives still think of it. But as Sam's alluded 229 00:12:53,458 --> 00:12:57,059 Matt Fehon: to, in the supply chain and your second, third, or 230 00:12:57,059 --> 00:13:00,660 Matt Fehon: fourth counterparty or down the supply chain where your goods 231 00:13:00,660 --> 00:13:04,860 Matt Fehon: are being sourced from, what is their cyber posture? Sam's 232 00:13:04,860 --> 00:13:09,360 Matt Fehon: touched on, importantly, insider risk. And again, I'll say, and 233 00:13:09,360 --> 00:13:13,230 Matt Fehon: when I talk my fraud investigations, it's the trusted insider 234 00:13:13,230 --> 00:13:16,830 Matt Fehon: that was at a major bank who caused significant damage 235 00:13:16,830 --> 00:13:21,270 Matt Fehon: and loss that Sam's focused. Who was the insider that 236 00:13:21,270 --> 00:13:24,900 Matt Fehon: would enable a cyber attack or some other malicious action? 237 00:13:24,960 --> 00:13:27,900 Matt Fehon: And then the final one for me, Sean, as I've 238 00:13:27,900 --> 00:13:31,650 Matt Fehon: touched on, is counterparty risk. Need to do proper due 239 00:13:31,650 --> 00:13:35,820 Matt Fehon: diligence and know your customer or know your counterparty. I 240 00:13:35,820 --> 00:13:38,670 Matt Fehon: think the final point, one thing that businesses and when 241 00:13:38,670 --> 00:13:41,100 Matt Fehon: they're struggling with supply chain and how they address it, 242 00:13:41,940 --> 00:13:44,400 Matt Fehon: what we've found in the work that we've done and 243 00:13:44,400 --> 00:13:48,719 Matt Fehon: when we've helped organizations actually manage their supply chain risk, 244 00:13:49,140 --> 00:13:51,809 Matt Fehon: they've just got a lack of credible information and they've 245 00:13:51,809 --> 00:13:55,500 Matt Fehon: got poor due diligence into those that are within the 246 00:13:55,500 --> 00:13:59,490 Matt Fehon: supply chain, the companies, but also the individuals that sit within 247 00:13:59,490 --> 00:14:03,090 Matt Fehon: those companies. So the processes and the information they gather 248 00:14:03,509 --> 00:14:06,238 Matt Fehon: is really poor, and that's often the gap that we 249 00:14:06,240 --> 00:14:10,590 Matt Fehon: fill and advise organizations what type of information they should 250 00:14:10,590 --> 00:14:12,150 Matt Fehon: be seeking to stay informed. 251 00:14:13,110 --> 00:14:15,390 Sean Aylmer: Matt, Sam, thank you for talking to Fear and Greed. 252 00:14:15,840 --> 00:14:16,319 Matt Fehon: Thanks, Sean. 253 00:14:16,770 --> 00:14:17,280 Sam Boarder: Thanks, Sean. 254 00:14:17,910 --> 00:14:21,059 Sean Aylmer: You've been listening to Matt Fehon and Sam Boarder, partners at 255 00:14:21,059 --> 00:14:24,359 Sean Aylmer: McGrathNicol Advisory, and great supporters of Fear and Greed. This 256 00:14:24,360 --> 00:14:26,430 Sean Aylmer: is the Fear and Greed Business Interview. Join us every 257 00:14:26,430 --> 00:14:28,770 Sean Aylmer: morning for the full episode of Fear and Greed, Australia's 258 00:14:28,770 --> 00:14:31,740 Sean Aylmer: best business podcast. I'm Sean Aylmer. Enjoy your day.