SpartanTec, Inc. Columbia: Cyber Risk Management: Why You Should Take Action Now

We presented 8 Best Practices to Manage Cyber Risk yesterday on our Wilmington website. We’ll now explain why these best practices are so important. Risk teams face constant challenges to ensure their organization is protected against the latest threats as technology advances. Cyber risk is the latest trend that has attracted attention. According to Risk.net‘s 2018 survey, cyber risk was ranked #1 and #2 in a list of the top ten operational threats.

Cyber risk: What does it mean? Cyber risk refers to the possibility of financial loss, disruption or reputational damage for an organization as a result of a failure in its IT systems. The Institute of Risk Management has more information about this definition. Cyber risk can pose a huge threat. Here are three reasons why it is a top concern that must effectively be managed.

Cyber risk management: 3 reasons

1. Respect regulations

Governments are creating new laws and standards to keep up with the changing environment. They are beneficial for society and consumers, but they can be costly and require significant organizational changes.

Recent concerns have been about data management and privacy. The government is putting more pressure on companies to secure this data, due to increasing data breaches that have resulted in the release of names, phone numbers and email addresses of individuals, as well as credit card information.

Organizations can take proactive measures to reduce cyber risk in order to gain competitive advantage in their industry. SpartanTec of Columbia will help you and your employees develop a plan to be secure in 2022.

2. Extremely high frequency

John Lupica, Chubb Insurance, stated that cyber risk is “The sole risk where someone is trying do real damage to your business every single day”. It’s not a matter “if”, it’s a matter “when” in some industries.

Cyber risk is a concern for all organizations, especially those that store sensitive consumer data like credit card numbers. It is impossible to avoid this risk because any organization can’t function without technology. Logic Manager found that data breaches have increased by 45% between 2016 and 2017, and this trend will continue.

Hackers are becoming more prevalent and better-trained. Social engineering is a popular tactic that hackers use to trick people into divulging confidential information. This can be done by getting their trust or using their curiosity.

With the advancements in technology, hacking has become more complicated. Organizations that are interested in accessing data can’t be stopped by simple firewalls. It is crucial that employees are fully educated and actively prevent cyber risk.

In today’s globalized world, interconnectivity and data sharing have become more common. With employees and organizations spreading around the globe, it is important to have access to remote data and tools that can be used for collaboration. These systems can be as secure, if managed well, as traditional in-house storage.

They still pose a risk. AT&T’s Cybersecurity Insights found that 85 percent of organizations share data with external parties, while only 28% have established standards to manage this risk. The 28% of organizations that don’t expose their data to outside parties are most likely the safest.

3. High severity

Organizations can’t expect cyber risk to be a problem they don’t see. Even the most powerful organizations can be affected by a well-planned cyberattack. Cyber risk can be so serious for many reasons.

Many risk teams underestimate this. AT&T found that while 65% of organizations think they have the right measures in place to protect themselves against cyber attacks, 80% of them have been affected by successful attacks. It is clear that there is a problem. Employees must be made aware of the severity and consequences. Small and medium-sized businesses may underestimate cyber risk. These organizations may think that they are too small or inefficient to reduce cyber risk. They are a prime target for hackers.

Clients can lose confidence in organizations and even sue them for a single data breach. Consumers will tell others about the experience if private information is released. The organization will struggle to prove to new customers that it is secure enough to be trusted. PwC’s study found that 87% customers will transfer their data to other companies if they aren’t satisfied with the organization’s handling of it.

Business disruption can also be caused by cyber risk. An attack can put an organization in crisis mode and make it impossible for them to continue their regular operations until the problem is resolved. A data breach could expose trade secrets and other confidential information that is essential for an organization to function. If the situation is not contained, imitations could soon appear on the market.

Cyberattacks can cause serious physical damage. Computer-controlled systems can be remotely accessed or shut down. In Germany, hackers created malware that caused a massive explosion in a steel mill and severe physical damage. You can read more about this incident and other similar incidents in “Cyber and Physical Threats Collide”.

Cyberattacks continue to be expensive on average. Organizations must pay for repairs and upgrades to their technology, as well as legal fees and settlements to customers whose information was compromised. These attacks are becoming more frequent and more powerful, which means that organizations have to pay more. In 2018, the average cyber attack cost was $8 million. This is up from $3.62million in 2017.

Cyber risk is complex and can be difficult to manage. Cyber risk is not something that can be ignored by any organization. These risks can have severe consequences.