OUTSOURCING IN 2025

The Australian Broker's Guide to Balancing Growth & Risk

Data Breaches Reported

1,113

(OAIC, 2024)

Caused by Human Error

30%

(Across all sectors)

Finance Sector Share

10%

(Of all reported breaches)

The Two Sides of the Coin

Outsourcing offers huge potential but comes with non-negotiable responsibilities.

The Rewards: Unlocking Growth

  • ✓Strategic Focus: Free up local teams for high-value client work.
  • ✓Cost Efficiency: Access skilled talent and predictable operational expenses.
  • ✓Scalability: Quickly adjust team size to meet market demand.

The Risks: Exposing Vulnerabilities

  • ✗Data Breaches: Increased exposure of sensitive client financial data.
  • ✗Compliance Failure: Severe penalties for breaching Australian Privacy & ASIC rules.
  • ✗Supply Chain Attacks: Accountability for your partner's (and their partners') security gaps.

Where Do Breaches Come From?

According to the OAIC, data breaches in the finance sector are primarily driven by malicious attacks, but human error remains a significant factor. This highlights the need for both strong technical defenses and robust internal processes.

Source: Office of the Australian Information Commissioner (OAIC) Notifiable Data Breach Reports.

Your Core Compliance Pillars

🔒

APP 11: Security

You must take "reasonable steps" to protect client data from misuse, loss, and unauthorized access, no matter where it's stored.

🌐

APP 8: Cross-Border

Before sending data offshore, you must ensure the recipient will protect it to Australian standards. Accountability cannot be outsourced.

💻

ASIC: Cyber Resilience

As an AFSL holder, you must have adequate risk management systems, including managing third-party and vendor security risks.

The Bulletproof Outsourcing Framework

A step-by-step process to leverage outsourcing securely and compliantly.

1. Due Diligence

Vet partner's security & finances

→
2. Contract

Mandate APPs & audit rights

→
3. Tech Safeguards

Enforce encryption & MFA

→
4. Internal Controls

Document processes & train staff

→
5. Ongoing Audits

Continuously monitor & test