Evaluate and assess Australia Latitude Financial response to Cyber-Attack/Hacking

Australia Latitude Financial Response to Cyber-Attack/Hacking Student’s Name Course Lecturer Date Introduction Due to its very nature of being heavily reliant upon digital infrastructure, the financial services industry is more susceptible to cyber threats, and its vast amounts of sensitive customer data are no exception. They can cause severe financial and reputational damage to cyber-attacks on financial institutions like the ones in Australia. These companies have suffered highly public cyber incidents, including Optus (millions of personal and financial details), Medibank (allegedly paid a hacker ransom of $3 million in bitcoins), and Latitude Financial (failing to detect scourge TEAR correctly) (Aslan et al., 2023). They show that cybercriminals are becoming more sophisticated and reinforcing the importance of robust cybersecurity frameworks, proactive risk management strategies, and regulatory compliance requirements. Financial Institutions continue to be prime targets for data breaches, resulting in post-breach long-term consequences such as identity theft and financial and customer loss of trust (Aslan et al., 2023). Following the Australian Prudential Regulation Authority's (APRA) reinforcement of cybersecurity expectations, financial institutions are strongly asked to develop adequate backup and detect data breaches (APRA, 2024). In 2023, Australian primary financial services provider Latitude Financial was hit with a severe cyber-attack that compromised the personal information of over 14 million customers. Balanced with the breach exposing highly sensitive data such as driver’s licenses, passports, and financial records adds to the debate about the company’s preparedness with their cybersecurity and risk management protocols (Barrett, 2023). Latitude Financial suspended key processing systems, engaging external cybersecurity firms and reporting the incident to regulators like APRA and the Australian Securities and Investment Commission (ASIC) (ASIC, 2024). However, these efforts did not go far enough, and the breach exposed a failure in Latitude’s cyber security framework, which stakeholders scrutinized. Frustrated customers saw delayed notification, and a lack of transparency in the company’s approach to dealing with the situation caused reputational damage (Ainsworth & Terzon, 2023). This paper critically assesses the organization’s risk management response, examining its risk appetite, assessment processes, and treatment strategies. Additionally, it evaluates the effectiveness of Latitude’s approach to managing the incident and identifies areas for improvement to enhance cybersecurity resilience in the financial services sector. Organization Context, Stakeholders, and Risk Appetite Latitude Financial is a leading Australian financial services provider with numerous customers utilizing personal loans, credit cards, and insurance products. The company heavily depends on digital platforms and cloud-based systems to process transactions and handle customer information. However, the benefits of digitalization to service delivery leave Latitude more exposed to cyber threats. Financial institutions are prone to cyber-attacks because they store valuable customer data, and therefore, cybersecurity is a priority for none other than cyber criminals. In the 2023 Latitude Financial cyber-attack, the company acknowledges a gap in its security framework and highlights the importance of a more comprehensive and proactive cybersecurity strategy (Latitude Financial, 2023). Before the breach, Latitude had seen to it that its measures were at the industry standard, but the degree of the breach shows a weakness in its overall risk management. For Latitude Financial, the implications of the cyber attack were substantial; its customers were hugely affected, and its regulators and investors were very concerned. The most significant impact was on customers whose personal and financial data was exposed, leading to more than 14 million people’s personal and confidential data, such as driver’s licenses and passports (Barrett, 2023). The breach increased the likelihood of identity theft and financial fraud, resulting in dissatisfied customers and alienated trust in the company. In response, Latitude is subject to scrutiny from regulatory bodies, including APRA and ASIC, to see if it adheres to cybersecurity regulations like APRA’s CPS 234 standard (APRA, 2024). Negative consequences followed shareholders and investors, given the reputational and financial damages it caused to Latitude and the drop in investor trust. Historically, Latitude Financial’s risk appetite has always been focused on meeting industry regulations to exclude a proactive approach to cybersecurity. Regarding Tarkaci and Gonul (2023), the company mainly stuck to ISO 27001 cybersecurity standard and APRA’s CPS 234 and had periodic system audits to detect possible loopholes. The fact that these measures were supposed to uphold regulatory compliance was insufficient to prevent a significant spill. With this, Latitude showed that it could not detect and not respond to attacks in real time; instead, it relied too much on traditional security frameworks powered by static threat intelligence (Hakim et al., 2024). Latitude's security strategy does not focus on continuous threat monitoring and early detection measures. Latitude’s lack of accurate time threat detection and the Zero Trust security model they did not invest in are critical gaps in their risk management. In order to lessen the risk of unauthorized access (Deon & Best, 2025), the Zero Trust security frameworks demand that access credentials be continuously verified and strict identity management enforced. They relied on conventional perimeter-based security defenses that the attackers exploited through phishing and social engineering techniques. The lack of proactive monitoring and incident detection capabilities allowed the attackers to deny access without being found out for a long time. While it was not the last failure, it indicates that Latitude Financial should strive towards adopting a more proactive and adaptable cybersecurity strategy that focuses on embarking on real-time threat intelligence, advanced authentication methods, and complete data protection policies to tackle future pitfalls adequately. Risk Assessment and Evaluation Process Before the 2023 cyber-attack, Latitude Financial had already implemented several security initiatives to protect the digital infrastructure. To protect customer data, the company added firewalls, encryption protocols, and multi-factor authentication and, as a result, incorporated the technology to protect itself. The purpose of these measures was to meet industry security standards, i.e., ISO 27001 and APRA’s CPS 234 cybersecurity requirements (Tarakçi & Gönül, 2023). Nevertheless, despite this layer of security, Latitude is not impervious to them. Due to the com...