The increasing demand for technology solutions in a digital transformation era presents opportunities and challenges, especially in sectors ranging from corporate IT to online entertainment like live blackjack. The 2022 Flexera Tech Spend Pulse report says that 71% of companies expect their IT budgets to rise yearly. This leads to the question: how will they divide these increased funds?
- 74% will focus on digital transformation initiatives
- 73% will divide resources to cybersecurity
- 65% plan to migrate to the cloud
This is all good news for technology companies (or the sales teams)! The tech market is growing. Businesses are excited about the chance to improve their services or add new ones, opening up more ways to make money. But it’s not all smooth sailing. Tech companies must manage a larger network of services. They must also handle the risks that come with it. Bad guys see these tech solutions as doors to get into big and small business data. This makes it super important for companies to have firm plans to protect against cyber risks.
This article will examine the main problems tech companies face. They struggle to keep their data safe from cyber risks. We’ll also talk about what these companies can do to lower the chance of their information being stolen or damaged.
Crashing the Party
When it comes to cyber risk management, parties cause problems. Tech companies are under a lot of pressure to manage their data. They also have to handle data from other companies they work with.
First-party issues relate to services and data a technology company hosts, manages, and utilizes. Financial records are stored on local servers. Legacy applications manage them. This is a form of first-party data.
When tech companies use third-party providers, like design, development, analytics, and security firms, they face particular challenges. These providers help tech companies offer excellent service to customers worldwide. Working with partners can bring significant benefits. It can make things run smoother and faster. Yet, it also has downsides. These partners handle important data. Managing this data is a big task for tech companies.
Escalating First-Party Data Threats
Attacks on first-party data are getting faster and more sophisticated. The IBM Security X-Force Threat Intelligence Index 2023 notes a drop in ransomware deployment time. It decreased from 9.5 days in 2020 to 3.85 days in 2021. Moreover, 74% of attacks are now using new methods. The financial stakes are high. The average data breach cost in the U.S. exceeds $9.4 million, as per the 2022 Cost of a Data Breach report. For technology companies, this means a greater emphasis on effective incident response to contain breaches and protect sensitive data like IP and financial information.
The Growing Challenge of Third-Party Security Breaches
Technology companies face escalating risks from third-party security breaches. Tech companies use more services from outside companies, but this can be risky. Deloitte’s report says these companies like trying new technologies. This can be risky, too. This situation makes it tricky to keep everything safe and secure. They enjoy using these outside services. Yet, they must be careful because some new services have yet to be tested.
Gartner highlights that failures in third-party risk management disrupt business operations in 84% of cases. 66% of the time, they cause financial losses. And 59% of the time, they damage reputation. Additionally, regulatory repercussions occurred in 33% of these incidents. VMWare’s report from 2022 shows that in 25% of cyber attacks, hackers are not going after data from outside companies but are also moving through networks to get to more important data inside the company.
Third-Party Risk Management: Key Challenges and Solutions
Tech companies know that cyber-attacks from outside sources can be a problem. Yet, they sometimes need a better plan to deal with them. They do security checks because they have to for rules and insurance. But, the tools they use, like rating systems or spreadsheets, only give them a quick look at the risks. These tools update only some of the time, so they can only sometimes tell what’s happening right now. This limitation results in ineffective decision-making and vulnerability to evolving cyber threats.
Companies think using spreadsheets to check for risks is helpful. Yet, only a few take action on these risks. Tech companies need better ways to handle risks from outside sources. They should use unique systems to spot and track the riskiest outside companies. Tools like CyberGRX are suitable for this. They help keep track of risks. This makes it easier to stop problems from outside sources before they happen.
When it comes to TPRM best practices, three components are critical:
Identification and Assessment
Effective TPRM requires identifying third-party risks and assessing their impact. One out of every five outside companies that organizations work with is considered high-risk. It’s important to figure out which ones they are. Once these risky companies are identified, businesses can work on making things safer. They can also decide to stop working with them. This helps companies focus on keeping their data and systems secure. Analysis and Reporting
Total risk isn’t defined by current third-party risk. It’s also connected to industry-wide threat data. Tech companies are now dealing with a new threat called ransomware-as-a-service (RaaS). This is where people with little skill can buy ready-made tools for attacking from the Dark Web. These tools help them break into the systems of other companies. They even come with help from the bad guys if they run into trouble or get caught early.
Security teams must know about these threats. They must understand how the threats could cause problems. This knowledge helps them be ready to take action and protect their company. It’s for monitoring and security.
Finally, tech firms need tools capable of continuous monitoring and security. Companies use more services from other companies to make their work smoother. They can attack in a different way. Businesses always need to know what’s going on in their systems. They need tools to act when there’s a problem to help lower the risk of something terrible happening.
Party Time is Over
First- and third-party data risks aren’t going away. Using good risk management strategies, tech companies can stop hackers from breaking in. These strategies help them see everything happening. They also show them up-to-date risks and let them change their plans when needed.