As cybersecurity dynamics keep moving, concerns with security have been put on to be mainly an IT department issue, just because they are the ones dealing with network responsibilities and contingencies1, but the reality is that digital asset protection should be a business concern- one equally divided along across departments as we’ve mentioned in our previous blogs. The idea of pressing these concerns only in the IT department is outdated and fails to address the multifaceted nature of cybersecurity threats that touch every aspect of a business. Therefore, solutions should be comprehensive, extending beyond just the corridors of the IT department.
The business implication of relying solely on and putting the responsibility of the cybersecurity of a company on the IT team is big. Far too many organizations fail to proactively manage risk. Across industries, it’s estimated that approximately 50%2 of organizations encounter difficulties proactively managing risk. So when a cyberattack is successful, companies that don’t recognize cybersecurity as a whole will most likely incur heftier expenses than those that are taking preventative measures and cross-training their whole team to prevent them in the first place. Following that, there comes a loss of reputation and trust in their client base, which can lead to even more added costs and potential loss of clients.
Main Financial Ramifications of Weak Proactive Risk Management:
- Costly Fines and Legal Consequences: Remember the 2017 Equifax fine? About $575 million fine was imposed for failing to patch and inform the public of the breach for weeks after it had been discovered failing to take reasonable steps to secure their network. Which leads to…
- Customer dissatisfaction combined with waning faith in your product, can have even further financial implications, often prompting customers to explore other options, which will also come with a damaged reputation and missed opportunities.
- Employee dissatisfaction, costly fines, and legal consequences, resulting from a company’s failure to proactively manage risks, can have a ripple effect, including employee dissatisfaction. Inadequate risk management not only leads to financial penalties but also creates a high-stress work environment and uncertain future, contributing to increased turnover rates and further challenges for the organization3.
The Cost of Cybersecurity Solutions vs. the Cost of a Breach:
As per the IBM4, “51% of organizations are planning to increase security investments as a result of a reach, including incident response (IR) planning and testing, employee training, and threat detection and response tools,” This growing trend reflects a fundamental shift in companies’ understanding that the expenses associated with cybersecurity solutions are significantly lower than the financial, reputation, and downtime costs incurred after a breach occurs. Industries like healthcare, financial services, and customer data preservation companies were highly likely to be front and center of attacks. However, it’s important to emphasize that the need for enhanced cybersecurity is not limited to specific industries; it spans across all sectors.
How Company Leaders Can be Held Accountable for Their Risk Management Practices:
Holding company leaders accountable for their risk management practices involves emphasizing the importance of cybersecurity at the highest levels. It means fostering a culture where cybersecurity is not just a task for the IT department but a collective responsibility shared across the organization. Leaders, including top executives, should lead by example, prioritizing cybersecurity as an integral part of the company’s overall business strategy
The now evolving legal and regulatory landscape in cybersecurity serves as an external driver for accountability. Stricter regulations and penalties are pushing leaders to take cybersecurity more seriously. However, it’s important to note that compliance alone may only result in minimal risk management practices. Achieving industry best practices requires a proactive approach, including having well-informed and expert teams. These teams can guide the organization in implementing effective risk management strategies, enhancing threat detection capabilities, and staying ahead in the ever-changing cybersecurity landscape.
In conclusion, cybersecurity is no longer confined to the IT department; it’s a fundamental concern for every part of a business. Relying solely on the IT team to safeguard digital assets is an outdated approach that fails to address the multifaceted nature of today’s cybersecurity threats. As we’ve seen, the financial ramifications of weak proactive risk management are substantial, encompassing costly fines, legal consequences, customer dissatisfaction, and employee unrest.
The shift towards recognizing the importance of cybersecurity investments is promising. More organizations are realizing that the cost of cybersecurity solutions fades in comparison to the potential financial, reputational, and downtime costs incurred after a breach. This understanding extends beyond specific industries, as the need for enhanced cybersecurity spans all sectors.