The Importance of Effective Cybersecurity for Companies

The threat of successful cyberattacks is one of the most serious business risks companies of all sizes and industries face. Cyber threats are a high-level risk for companies and IT executives, and they should invest in an effective cybersecurity program for their companies. Since the first computer viruses appeared in the 1970s and the Morris worm became the first major internet-based attack in 1988, the volume and sophistication of cyberattacks have increased substantially. Additionally, the number of devices connected to the internet and corporate networks has skyrocketed in recent decades. The reliance on IT systems for routine business processes has increased in recent years, owing in part to corporate digital transformation projects. A single successful attack can be catastrophic with the potential to expose personal information, disrupt companies’ operations, disable critical infrastructure, and physically harm people.

Recognizing the importance of an effective cybersecurity, enterprise executives in numerous companies have prioritized it, looking to implement more strongest policies, procedures, and technologies to defend against all types of cyber threats, including data breaches, ransomware attacks, and phishing attacks. For the third year in a row, the “2024 Focus on the Future” report from a software vendor listed cybersecurity and data security as the top risk area among risk management and internal audit executives who were surveyed. More than 80% of the 453 respondents ranked it first in terms of projected audit efforts in 2024. According to a “2024 Global Trust Insights” survey, mitigating cyber risk was second among the 3,876 companies and IT leaders polled, trailing only managing digital and technological risks. These perspectives are driving up cybersecurity budgets. A consulting and market research company projected that the overall spending on security and risk management by global user companies will reach $215 billion in 2024, a 14.3% rise over the $188.1 billion estimated for 2023.

Why Companies Must Have Strong Cybersecurity to Succeed

The following criteria demonstrate why having effective cybersecurity is an important component of doing business:

• Because nearly every company relies on IT systems to function, the ramifications of successful cyberattacks have dramatically increased. Companies have become reliant on technology that most businesses can’t function without.
• Data is becoming one of the most precious assets in most companies, if not the most valuable asset. Any security vulnerabilities that compromise companies’ data quality or access could impact business operations.
• Cybercrime is increasing in almost every manner. The number of threat actors is growing, as is the sophistication of their attacks and their access to tools and technologies to aid in their attack execution. One example is the rising availability of ransomware as a service and other as-a-service malware that made it easier for threat operators to strike. The “Cybersecurity Forecast 2024” report from Google Cloud makes similar concerns, warning that threat operators are exploiting AI to their advantage and new trends in malware development are making it faster to generate and harder to detect.
• Numerous companies are required by government rules and industry obligations to implement cybersecurity standards, giving them no choice but to prioritize cybersecurity. The United States, individual states, the European Union, and other governments all have laws mandating companies to protect sensitive data and follow specified cybersecurity practices. In July 2023, the United States Securities and Exchange Commission adopted rules that required all companies that file registration statements for stock offerings to disclose “material cybersecurity incidents” and to submit information on their cybersecurity strategy, governance, and risk management initiatives on an annual basis. PCI DSS is an industry mandate which establishes common security policies and procedures for all companies that accept payment cards.
• Numerous customers and business clients have increased expectations that companies will invest in cybersecurity to prevent cybercriminals from stealing customers’ information and causing harm to customers and clients. Meeting the requirements creates opportunities for companies. Companies can create and build trust with customers which can translate into revenue gains.

Costs and Consequences of Cybercrimes

The financial repercussions of cybercrime are astounding. Here are some overall figures:

• According to a 2023 data breach report, the average cost of a data breach among 553 global companies was $4.45 million, based on a study by a research company that investigated breaches occurring between March 2022 and March 2023. It was an all-time high for the annual report, representing a 2% increase over the previous year and a 15% increase above the 2020 level.
• A digital trust survey discovered that the average cost of harmful cyberattacks was $4.4 million, with 36% of respondents reporting data breaches with an estimated cost of more than $1 million in the previous three years.
• According to a “The State of Ransomware 2023” report from a cybersecurity software company that commissioned the survey of 3,000 IT and cybersecurity professionals, the average ransomware payment in response to successful ransomware attacks during the last 12 months was $1.54 million. It was almost double the annual survey’s average payment of $812,380 in 2022. Additionally, respondents to the 2023 survey indicated an average of $1.82 million in estimated recovery expenses, including downtime, people time, device costs, and lost companies opportunities.
• According to a market data and research company, the annual cost of global cybercrime is predicted to be $8.15 trillion in 2023 and $13.82 trillion in 2028.

There’s an endless list of cybersecurity incidents. One example is a ransomware attack on MGM Resorts International in September 2023 used social engineering techniques to obtain access to privileged user accounts cost the hotel company an estimated $100 million and disrupted clients’ room access, casino gaming, and other services. MGM stated that its cybersecurity insurance policy would cover all expenditures, but it also revealed that the threat operators obtained personal information on some clients, including driver’s licenses, Social Security, and passport numbers. The same month, Caesars Entertainment was targeted similarly. According to a major newspaper, it paid a $15 million ransom and reported that the threat operators stole sensitive personal information from clients. Caesars stated in an SEC filing that it took steps to ensure that the stolen data was deleted by the unauthorized threat operator.

Another example is the 2021 ransomware attack on Colonial Pipeline, which caused gas supply outages in numerous US states and cost the pipeline operator $4.4 million in ransom payments, which the United States Department of Justice eventually recovered some of the money. A.P. Moller-Maersk, a shipping company in Denmark, sustained losses of up to $300 million after a 2017 malware attack shutting down the systems used to manage the global shipping terminals. When companies’ cybersecurity defenses are breached, it often confronts a long list of costs as it looks to combat the attacks, restore compromised systems, and recover from the incident. Companies should budget for outside technical support, internal and external legal counsel, data breach notification costs, regulatory fines, and the required staff time. Additionally, companies will have expenditures resulting from lost sales and business opportunities. Companies’ reputations with clients could also suffer, which can lead to extra lost revenue in the future. The costs and consequences of cyberattacks could potentially bankrupt companies, particularly those lacking the resources and reserves to weather the incidents’ aftermath. With small companies, one cyberattack can take them out.

Effective Cybersecurity Can Benefit Companies

The consequences of cyberattacks have compelled numerous company leaders, including directors, CEOs, CFOs, other senior company executives, CIOs, and CISOs to prioritize improving their companies’ security posture. According to a 2023 Global Future of Cyber Survey from a professional services company, 70% of more than 1,000 cybersecurity decision-makers claimed security problems were on their board’s agenda either monthly or quarterly. Additionally, 86% stated that cybersecurity activities had significantly improved at least one critical business priority, including customer trust, brand reputation, and operational stability. The findings reflect a shift in CEOs’ mindset, with the cybersecurity program now viewed as an enabler of companies’ operations rather than a backstop for preventing losses. It’s the perspective companies must have when it comes to cybersecurity allowing them to do things they couldn’t do before to be more efficient, save money and be more productive. One example is a company building a self-service portal for its customers, however, it’s only possible if the company has suitable security procedures in place to verify users and protect their data.

Key Components of an Effective Cybersecurity Plan

There’s no single standard for what constitutes an effective cybersecurity program, and each company must choose its level of protection. It includes notions like risk appetite, risk tolerance, and the amount of residual risk that company executives are ready to take. If the companies are comfortable identifying and managing the risks, and the risks left on the table to fit their risk profile, then the companies have a good program. Additionally, companies must identify crucial systems and assets, and understand the specific cyber threats they’re most likely to face, to invest in the necessary people, processes, and technology to reduce security risks to an acceptable level. Creating a cybersecurity plan is a continuous process since things change all the time. Other important aspects of developing a good cybersecurity strategy include the following:

• Aligning with companies’ goals
• Visibility into where data is stored within companies. Understanding where it’s stored, who has access, what access controls are in place and the entry points to the data.
• Understanding security and data privacy laws to which companies must adhere.
• Detailed cybersecurity risk assessments assess companies’ current ability to protect themselves against cyber threats and find areas where their defenses fall short. Measure where companies have gaps and decide what initiatives to implement to close the gaps.
• A predefined set of cybersecurity measures for assessing how well the security program operates and improves over time.
• Cybersecurity governance structures ensure employees follow the defined security policies and procedures.
• Senior executives’ support and involvement will help ensure that cybersecurity programs receive enough financing and high-level lobbying.
• Comprehensive incident response plans are regularly tested and practiced by both security teams and company units.

Tips on How to Implement and Manage Cybersecurity Programs

To establish an effective cybersecurity program, consider the following best practices:

• Building a Security-Minded Culture – Creating internal cultures that prioritize cybersecurity is essential. All stakeholders need to know and understand their responsibilities from a cybersecurity perspective because security needs to be everybody’s job.
• Implement Comprehensive Cybersecurity Awareness and Training Programs – To build a cybersecurity culture, all employees and important stakeholders need to be informed about the importance of cybersecurity and the companies’ specific policies and procedures.
• Creating Cybersecurity Champions – Individuals within companies who understand the importance of adhering to security policies and procedures. Championing security began with the CISOs; however, they can’t do it all.
• Focusing on Improving Cybersecurity Performance – Every day needs to be about continuous improvement.

As we begin 2024, companies must remain vigilant of the latest threat landscape and understand the importance of having an effective cybersecurity program. SpearTip’s service offerings were created with client journeys in mind. Whether companies have never utilized any cybersecurity services, or they’re the most thorough organization in the world, SpearTip has solutions to meet your specific needs. Advisory services provide a proactive approach to understanding your network vulnerabilities, ShadowSpear provides constant eyes on the glass to respond to active threats, and Incident Response helps your organization get back into a fully operational state following a cyberattack. Our Advisory Services are your solution to safeguard and counter complex cyber threats. Our team is equipped to address security issues, including ransomware, business email compromise, and insider threats. By identifying weak points in your system and addressing them, we continually work towards improving your security posture. SpearTip’s engineers and analysts within our 24/7/365 Security Operations Center utilize the ShadowSpear Platform to respond to active threats by continuously monitoring your environment. The SOC is built to relieve the burden of cybersecurity from your team by acting and informing your organization. Our Security Operations Center remains staffed 24/7/365, working in a continuous investigative cycle to respond to unwarranted intrusions at a moment’s notice. Within minutes of engagement, SpearTip can respond to the breach and reclaim networks within hours. Then, we deliver a detailed report for comprehensive understanding.

If your company is experiencing a breach, call our Security Operations Center at 833.997.7327 to speak directly with an engineer.