As the world watched the EU hit Google with the biggest data protection fine in history earlier this year, businesses across the US are realizing that no one is immune from the penalties of mishandling data.
From healthcare's HIPAA and the technology industry's ISO 27001 to the more recent General Data Protection Regulation and New York Department of Financial Services' cybersecurity regulation, data protection laws and regulations are on the rise. Several states already have passed data protection laws in the wake of GDPR.
It's no surprise that annual cybersecurity expenditures among US businesses have risen, due, in part, to the flood of regulations facing the marketplace. Some projections indicate private sector spending on cybersecurity will exceed $1 trillion from 2017 to 2021. Despite the surge in both regulations and cybersecurity budgets, Malwarebytes, in its "Q1 2019 Cybercrime Tactics and Techniques" report, found that small- to medium-sized businesses still saw a 235% increase in detections year-over-year.
One would think that as investments in cybersecurity rise, breaches would decrease or, at least, hold steady. That doesn't seem to be the case, according to a wide body of research. Of course, many factors contribute to the rise in breaches, including more connectivity, increasingly complex systems, and the proliferation of cybercriminals looking to take advantage of new exploit tools and platforms, and the anonymity of cryptocurrencies. This leaves many asking: Is cybersecurity worth the investment?
That depends. Here's a closer look:
Security first: Lately, there's been so much of a focus on compliance that many companies are losing sight of the actual goal: security. But shouldn't compliance equal security? No. It's possible to maintain compliance without reducing risk. Unfortunately, many businesses have a false sense of security because they think certification will solve all their problems. From an economic perspective, it makes sense to treat compliance as a by-product of security. That means the focus should be on implementing cybersecurity processes and tools that are based on risk. And, as a result, the company will not only achieve compliance but be better equipped to withstand a breach or attack, possibly saving the organization significant capital.
Business-risk decision: Too often, business leaders are so laser-focused on compliance that they leave it up to their compliance departments to manage the process. However, pigeonholing cybersecurity to any single department isn't a good idea. Cybersecurity is a complex business-risk decision because it's integrated into every aspect of the business.
For example, it's difficult for the average person to comprehend how the Internet actually works; there are too many independent pieces making up this massive pile of pathways and technologies that no single organization controls. Cybersecurity is the same way inside an organization. It's too big and too complex for one person to have all the details; therefore, no one person can grasp it in its entirety — it must be a shared responsibility. And, as data and information flow through organizations, and are processed and influenced in faster and larger ways, a business's cybersecurity program must be able to adapt to that change. If it's pinned down to one department, it will fail.
Risk-based: Any business that has a cybersecurity program that's not based on risk is wasting its resources. Furthermore, the people tasked with doing this work are likely frustrated at their inability to contribute. A risk-based program begins with a risk assessment that identifies how much data the company has, where that data is located, what value it provides, and what liabilities are associated with it. If any of the above items are unknown, how does a company know how much of its budget to spend protecting its data? How does it know what technology needs to be adapted? What business practices need to be adjusted? How do you train people to protect that data? If business leaders aren't basing their cybersecurity programs on risk, they're not certain what to do; they're just guessing, and that's not only dangerous, it's negligent. This leads to underspending, and the topic many don't talk about, overspending. If you're doing it right, you're neither spending too little nor too much and you're creating a defensible position that stands up in front of the board, auditors, regulators, or business partners.
Baked in: Many business leaders don't recognize the economic impact of a risk-based cybersecurity program. In today's world, where most breaches come via third-party vendors — some 63%, according to a survey by Soha Systems — large companies such as Boeing and United are protecting themselves from these startups by requiring them to have proper certifications in place. The result? Many new companies are losing big contracts with these large corporations because they forgot to bake proper security practices into their product or service delivery processes.
The lesson? It pays to invest in cybersecurity, especially if a company plans to provide goods and services to other companies. Unfortunately, many startups in their early development stages don't realize the implications until it's too late and they've missed out on the big contract altogether.
Whether companies like it or not, cybersecurity will become more regulated, increasing the cost of doing business and raising the security standards of both clients and potential business partners. However, if companies follow these guidelines and learn how to use risk to best position their program for success, they will see a real return on their investment in cybersecurity. Best of all, their business partners will notice. Some might even ask for pointers.
Editor's Note: This column was updated 6/5/2019 to eliminate an inaccurate statistic.