Every business has different operational requirements, and that’s certainly the case when it comes to budgets. As a growing number of IT budgets are steadily increasing to cover the costs of innovative technologies and digital transformation, more businesses are also re-evaluating their cybersecurity budgets as well. A major part of this re-evaluation is having the proper management to identify the right spending level for cybersecurity based on the level of risk mitigation the company is willing to allow. Unfortunately, in many cases a company’s spending plan on cyber defense is usually funneled into a rigid budget rather than managed by a legitimate cybersecurity assessment.
However, cybersecurity spending needs to be treated much more importantly than ever before because excessive damages of a successful attack can be catastrophic to any business. The thousands of dollars a business spends now can instead cost millions later when a ransomware attack or phishing scheme actually penetrates defenses.
Many companies end up getting generic cyber insurance to cover any direct financial costs, but keep in mind that most of these plans are not a substitute for cybersecurity. Insurance providers can’t help with things like major reputational damage, and if sensitive data is leaked, they will many times focus on gross negligence in order to not pay or limit their exposure. In the wake of the pandemic and the recent international conflict between Ukraine and Russia, companies shouldn’t think of cyberattacks as being only a theoretical risk and small chance, as the world has now created more vulnerabilities than ever before.
WE’RE TOO SMALL OF A COMPANY TO BE A TARGET
No matter the size of a company, it’s never a good thing to postpone a cybersecurity budget because of a “company size” mindset. Regardless of the size of the company cybercriminals, are very cunning when it comes to discovering new targets. With many companies now adopting digital transformation strategies, having a solid risk mitigation plan for cybersecurity is a valuable endeavor. The impact of a major data breach can be devastating not only financially, but extremely damaging to the company’s reputation in a number of ways. It’s much less expensive to prevent cyberattacks with good defenses than to repair all the damage when they actually happen. There are also times that accountants can’t estimate all the damages, such as reputational damage that pushes customers and clients to not want products or services from the business in the future.
In one example of a breach of a major retailer, attackers gained access by phishing an employee of a third-party vendor that serviced their HVAC systems. The phished email was able to install a password stealing bot that completely exposed their logon credentials onto the company network. Their most costly mistake was not adequately protecting themselves by segmenting their networks. So even though a company may seem “too small” to worry about cybersecurity, many of their partners and customers could be large enough to warrant a better cybersecurity plan.
As the example above demonstrates, it’s not only the big corporations with large-scale budgets that should be investing in a cybersecurity infrastructure. Security needs to be a top business priority, especially if you’re working with larger clients or a vast amount of customer data. Cutting funds from cybersecurity is all too normal, but it can lead to a much more expensive security breach later on.
In fact, one of the largest financial threats that should be on every company’s mind is ransomware. According to a recent report, the average recovery costs from a ransomware attack more than doubled from the previous year, increasing from $761,106 in 2020 to $1.85 million in 2021, with the average ransom paid at $170,404. Because of these alarming stats, many businesses can’t afford to pay up when they’re hit with a random ransomware attack.
However, by making a budget for cybersecurity safeguards, businesses can defend themselves against ransomware and many other threats – significantly reducing their risks and costs.
BUILDING AN EFFICIENT CYBERSECURITY BUDGET
The right approach for building a cybersecurity budget is to actually put the budget considerations aside and first evaluate what assets need to be protected. A good starting point is having a risk assessment, not how much funds need to be allocated for cyber defense.
This “risk-first” approach helps companies make effective decisions on which threats are considered crippling for the company versus potentially acceptable.
Once the risk outlook has been determined, companies can start building an efficient budget to address potential threats and only cover what’s needed. With this framework already set up in the beginning, management can spend as needed, knowing all important weaknesses are fortified and ready for any future threats.
MITIGATE CYBERATTACKS WITH TENACE
Tenace’s Risk Advisory Services are helpful in identifying all of your critical infrastructure risk areas. We can help determine the risk footprint of your organization and what costly risks could arise if vulnerabilities are not remediated. Contact us today for more information.