Startups and the High Costs of Cyber Risk
Lately, I have been spending a lot of time discussing Cyber Risk Management with companies and at conferences. This has become a hot topic based on some recent cases of cyber espionage and lost data. For start-up technology companies, the risks associated Cyber Liability are higher than most. This is due to the nature of their products and services, and reliance upon social media for marketing and freeware for technology solutions
Technologies such as Mobility and Cloud, and utilization of Big Data have increased the vulnerability that companies have, as they are opening up data and channels that have historically been kept private behind firewalls and DMZs (demilitarized zones) to the public. Social media has become a requirement for marketing strategies for all companies, large and small, and for start-ups it provides an opportunity to be on an even playing field as the enterprises. The problem is this can present an opportunity for confidential information leakage, copyright infringement and reputational damage.
The worrisome part is that criminals are focusing on small and medium businesses versus the enterprises that have implemented robust Enterprise Risk Management strategies – an alarming 72% of attacks on companies 100 employees or less (Verizon 2012 Data Breach Investigation Report). When a small company is attacked, the average company is so financially devastated that 60% of them are forced out of business within 6 months and 90% within 2 years (Ponemon Institute 2012 Cost of Data Breach Study).
The first step is to create a Cyber Risk Management strategy starting from the top, then working with your IT team, Legal Team and Insurance Broker to mitigate and transfer all risks.
Industry Leader, Technology