An Ernst & Young report, wherein more than 1,700 company executives and IT managers were surveyed from across the world, found that 41 percent of companies outsourced their security monitoring. It also showed that 52 percent companies outsourced their vulnerability assessments, 21 percent their cyber security help center, and 21 percent their self-phishing drills. Another 56 percent respondents said they outsourced their business-specific cyber security activities and 33 percent revealed they subcontracted the development of their cyber security management mechanisms and systems.
Cyber attacks have changed dramatically both in form and shape over the years, what with their targets shifting to banks, manufacturers, credit card processors etc. and even companies of all sizes and from different industries including social media, retail, energy, manufacturing, and IT among others. No one is truly safe today it seems! The question that arises then is – what has led to such an increase in data leaks and cyber attacks lately? How has outsourcing become an unlikely cyber security savior for all businesses of all sizes across the world?
Several myths continue to plague organizations’ policy-making when it comes to data breaches and cyber security. Data is generally considered to be safe as long as it does not contain confidential information. The understanding of “confidential information” is flawed as it is not limited to trade secrets and client lists. A cyber attack can easily expose employees’ names, addresses, and payroll data to identity thieves.
Cyber attacks continue to outpace defense, and one reason for this is the absence of an adequate cyber security workforce. To truly understand the magnitude of the problem, we need to ascertain the reasons behind data breach first. Recent stats suggest that approximately 38 percent of organizations “have no set time period for reviewing and updating their [data breach response] plan” while an estimated 31 percent companies were not confident of their ability to address an international data breach.
A common cyber security mistake businesses make is to confuse good compliance with good security. Simply adhering to regulatory or industry-related rules doesn’t make your systems and data secure. Infact, complying with such standards is just the minimum obligatory requirement vis-a-vis security.
Another mistake businesses tend to make is leave their security to a low-key “security” team, which is not always aware of the high-risk and high-value assets and is not even properly trained and aware of the qualities needed to ensure foolproof data security.
Shred All, a Canadian document destruction company, claims that employee negligence accounts for 32 percent of all data security breaches. Mistakes like emails sent to incorrect addresses, lost communication devices, and improperly disposed confidential documents are some of the other major reasons that could easily expose sensitive company data. Insecure web pages and loss or theft of unencrypted devices also play a major role in data leak and theft these days as fraudulent individuals/groups are willing to pay a premium for user information.
The growing skill gap vis-à-vis cyber security and a shortage of cyber security experts are amongst the many causative factors, which lead to security breaches. Despite technology being able to detect attacks on data, the absence of a qualified team and human errors ultimately don’t let small and mid-level businesses take corrective actions on time.
Businesses that outsource their security needs basically hire an organization whose inherent business model involves securing other businesses. An outsourcing cyber security service provider may provide expertise that may just not be available internally within an organization.
Outsourcing vendors begin by identifying both high-risk and high-value assets and then build customized security strategies around them. They map processes and workflows and perform audits to identify weaknesses, which may lead to breaches. They help improve security by installing relevant patches in a timely manner, using basic encryption tools and eliminating all the ‘obvious’ causes for concern.
Outsourcing cyber security isn’t just a great way to save a good amount of money and time, it also addresses another pressing concern, that of skill gap that you may face locally. There just aren’t enough cyber security experts to keep pace with the massive pace at which online businesses are growing today. The best option for most startups as well as small and mid-level businesses today is to outsource their cyber security functions to a reputable cyber security provider. Apart from making your data secure, outsourcing service providers also provide subject matter experts in cyberspace law, cyber security, risk assessment and management, audit and compliance, governance and policies, and much more.
Few small and midsize companies have an internal IT security staff and the necessary budget to implement and manage a comprehensive cyber security program. Hiring an in-house security expert may be an option for some businesses; however, it is the most challenging opening to fill in an IT department.
Benefits of outsourcing your company’s security needs also include the following:
It appears as if a major cyber security breach in a major corporation is happening every week or even daily for that matter! In September 2016, Yahoo, a once dominant Internet giant, became a victim of one of the biggest data breaches in history, while in 2014, the real names, email addresses, dates of birth, and telephone numbers of over 1 billion of its user accounts were compromised. Equifax, one of the largest credit bureaus in the US, announced last year that a data breach on one of its websites exposed about 147.9 million consumers, while the personal information of 57 million Uber users and 6,00,000 drivers too was compromised in late 2016.
A major data breach can turn out to be disastrous for any company. Data breach-associated losses go beyond financial ruins as they can also destroy the reputation of both individuals and organizations. Businesses that are yet to update their security measures do so at their own peril. They might save money or have a false sense of control in the short run, but actually they are rendering themselves susceptible to sensitive company data breach. A data breach, inevitably, results in financial losses, smeared brand image, and reduced consumer confidence.
According to the Ponemon Institute’s 2016 Cost of Data Breach Study, “the average consolidated total cost of a data breach grew from USD 3.8 million [in 2015] to USD 4 million [in 2016].” The study added that “the average cost incurred for each lost or stolen record containing sensitive and confidential information increased from USD 154 [in 2015] to USD 158 [in 2016].”
A survey commissioned by a UK-based fraud prevention company, Semafone, revealed that 86.55 percent of people were “not very likely” or “not at all likely” to do business with a company that lost credit or debit card information to data breach. In the case of such companies, customers begin to doubt whether their data is safe, prompting them to move elsewhere (read about your competitors!) consequently. If you’ve had a breach, what are the chances you will not have another one? Even vendors will become wary of working with you.
Moreover, data breaches are a major financial burden as they involve incurring additional costs to salvage the situation. When a breach is discovered, you may not be able to continue your operations as systems are generally shut down to plug the security loophole. Thereafter, PR firms come into picture to do damage control. And if the affected parties sue you, legal fees and penalties may cause you further trouble. All of these put together can become a massive burden for startups and small businesses, and may even lead to their closure.
It’s only a matter of time before businesses become a target of data breach or cyber attacks in today’s hyper-connected, data-intensive world. With the emergence of thousands of e-commerce sites, mobile applications, and online businesses and websites that often house huge amounts of valuable user data, and sometimes lack sufficient defensive measures, you have easy targets for hackers and cyber criminals. Even disgruntled employees can inflict tremendous harm on their employers if they choose to take revenge on the business by divulging sensitive information.
Data breach results in financial losses through theft of payment cards and bank account numbers. It may also result in identity fraud if hackers put your users’ reputation in jeopardy. Given such massive risks, protecting customers’ data should be one of the biggest constituents of any business strategy.
Data breaches are terrifyingly happening regularly, and are affecting businesses of all sizes – startups, SMEs, big corporations etc. With leak threats continuing to evolve and multiplying at an alarming rate, how can businesses detect and respond to cyber attacks and breaches going forward?
As the number of cyber security breaches increases, more companies will need a comprehensive and robust security apparatus. To this end, you should look for OSPs with a tremendous understanding of the current cyber security needs and who are expert in managing your security needs as well. While outsourcing firms can’t guarantee 100% safety every day, they will for sure reduce the risk percentage and ward off possible attacks regularly. If you are a small business owner, you will be able to rest better, knowing that experts are monitoring your network and businesses carefully and keeping your data safe and secure every day. If you are keen on channelizing your resources toward making your business grow further, hiring outsourcing service providers is the way to go for you!
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