The amount of "dark communications" which New Zealand spy agencies are unable to intercept is increasing, Prime Minister John Key says.
Mr Key made the comments in response to reports that French intelligence did not pick up any communications which foreshadowed the massive, co-ordinated terror attacks in Paris on Friday night.
The Islamic State (ISIS) was now much more aware of which technologies could be intercepted, Mr Key told reporters in Hanoi today.
He said was "possible" that the 40 people on New Zealand's terror watch list were also using highly encrypted technology, but he would not comment on specific communications or apps they could be using.
Intelligence officials had told him that New Zealand spies were now faced with bigger obstacles in monitoring suspects.
"The amount of dark communications that are not [detectable] by our agencies is increasing," he said.
New Zealand's Security Intelligence Service (SIS) and Government Communications Security Bureau (GCSB) are now under review. Mr Key was asked whether the review could lead to changes which addressed technological advances.
He said the issue was not the spy agencies' capacity, because the legislation which governed the SIS and GCSB was already "reasonably broad".
"The issue is that this technology is very difficult to break into, essentially. So you are seeing people doing things that are a lot more sophisticated than in the past."
It has been reported that Iraqi forces gave a non-specific warning to the US-led coalition a day before the attacks.
Mr Key said he did not believe that New Zealand received any warning through its connection to the Five Eyes Network.
The Prime Minister also addressed questions about New Zealand's refugee programme in light of unconfirmed reports that two of the Paris attackers posed as asylum seekers to cross the border into Europe.
A Syrian passport was found near one of the dead gunmen, and its holder reportedly entered the country as an asylum seeker in Greece last month. Details about the man's origin have not been confirmed and Mr Key yesterday warned against rushing to conclusions.
Speaking to reporters today, Mr Key reiterated that New Zealand's refugee vetting process was more rigorous than in Europe.
New Zealand-bound refugees were sourced from camps, where they had been established for a long period. This meant they were more likely to be genuine, Mr Key said.
After being approved by the United Nations, New Zealand officials at the camps assessed their paperwork, interviewed them, and retained the right to reject their application.
"So it's quite a different situation from where someone who pours over a porous border," Mr Key said.
Refugees had been rejected by New Zealand in the past after getting UN approval, but not in recent times.
Some hardline anti-immigration groups have seized upon reports of refugee involvement in the Paris murders to encourage tighter border controls.
Mr Key said most refugees were genuine and New Zealand needed to embrace them and help to integrate them.
One of the broader issues cited as being behind terror attacks was the feeling that a person did not belong in a country.
"So on the basis that you are going to take refugees as a country, an important thing is you do a proper job of it," Mr Key said.