What are the Most Common Cyber Security Spending Mistakes?
March 4, 2023, 7 min read
Cybersecurity spending and risk management is expected to increase by 11.3%, to more than $188.3 billion by 2023. The next two years should be particularly fruitful for the cloud security industry. Gartner predicts that the integrated risk management (IRM) market will grow by double digits through 2024 as businesses become more concerned about environmental, social, and governance (ESG), third-party (TP), cyber, and privacy risks. Spending on cybersecurity is expected to continue until increased competition leads to cheaper solutions.
What factors influence cybersecurity spending?
The cost of cyber protection for your company will depend on a variety of things. That complicates the process of allocating funds for cyber defences. Here are some things to think about while budgeting for cyber protection:
The Sector You Work In
Regrettably, not all sectors have to deal with the same security challenges. It’s important to remember that industries all have unique challenges. The healthcare, finance, energy, and utility industries are particularly vulnerable to cyber attacks. Therefore, additional security measures should be implemented to safeguard a network serving a high-risk industry.
More rigorous rules are in place in several fields because of the inherent dangers they present. You may need to spend a lot on high-end security equipment and cyber insurance to ensure compliance with these rules.
The Different Kinds of Information You Save
Do you save sensitive consumer data such social security numbers, medical histories, and credit card details? That factor can affect how many different types of security you need to implement.
Cybercriminals aim to steal personal information because of its monetary value. The damage an attack could do financially could be devastating, especially to smaller enterprises. The average cost of a data breach in 2021 is expected to be $4.24 million, up 10% from 2020, according to research conducted by IBM and the Ponemon Institute. While the exact figure will vary from business to business, even a low estimate might be a significant burden.
According to research conducted by the US National Cyber Security Alliance, 60% of small businesses fail within a year of experiencing a data breach. To avoid that, it’s important to have adequate protections in place against cyberattacks.
Conclusions from the Risk Analysis
It is essential to conduct a cybersecurity assessment, whether for the purpose of meeting regulatory requirements or for the purpose of identifying potential weak points in your network security. Either you or a third party, such as a managed IT service company, can evaluate the situation (MSP). Then you can see potential dangers that were hiding in plain sight all along.
The findings of an evaluation can point up potential weak spots and areas for development. For assistance determining which cybersecurity options are most appropriate for your company’s needs and the needs of your sector, you can draw on the knowledge and insight of professionals in the field. To what extent you’d need to invest in new apparatus and machinery would also be affected by this.
Finances for Information Technology
How much money should be allocated for cyber defences? Experts are increasing their IT spending by 10–15%, as reported by multiple sources. Other resources include industry standards such as the Financial Services Sector Cybersecurity Profile. You can see how much money similar organisations invest on cybersecurity by referring to these metrics.
Can money be wasted on cyber defences? In all likelihood, no. Alerts from unmonitored security information and event management (SIEM) systems are useless. However, if you are unable to fully take use of the security solutions you adopt, your investment may as well have been in vain.
To that end, it’s crucial that, while planning for cybersecurity, you prioritise cost optimization rather than expense reduction. Consider whether you have the manpower and supplies necessary to make the most of the options at your disposal.
The Access to Qualified Workers’ Technical Expertise
There is a severe lack of qualified workers in the cybersecurity sector. There were 2.72 million unfilled cybersecurity jobs in 2021, per the (ISC)2 Cybersecurity Workforce Study. That chasm has caused a lot of issues for companies of all sizes.
Due to a lack of qualified candidates, several businesses’ security measures have been compromised. Half of businesses surveyed by Opinium in 2019 identified a lack of cybersecurity professionals as a top challenge.
Making your own security operations centre from scratch could end up being quite an expensive endeavour. Locating and securing the needed workforce is challenging enough without additionally having to plan for the inevitable shifts that will be required.
The Importance of Cyber Insurance and Obligations to Meet Regulations
Whether from the government or an international organisation, more stringent cybersecurity requirements may be in place for some industries. Some states and industries mandate specific security measures, while others may request that you carry cyber insurance.
Your spending plan for cyber defence may need to be significantly adjusted. It’s possible that your premium will be quite high due to the underwriter’s assessment of your cyber defences. More strict steps have been introduced by many insurance companies these days to guarantee that their customers are using appropriate security measures to limit their vulnerability to loss.
What is the future of cybersecurity spending?
According to Cybersecurity Ventures, between 2021 and 2025, worldwide spending on cybersecurity products and services will reach $1.75 trillion as a result of the growing need to safeguard more digital organisations, IoT devices, and consumers against cybercrime. The enormous shift brought about by the COVID-19 epidemic is somewhat reflected in the data.
Over the past year, businesses have doubled down on online services, revamping old goods and establishing totally new cloud-based ones, in response to the pressing need to implement digital transformation efforts at record speeds.
However, as these services rose to the forefront of businesses’ digital transformations, they also became easy targets for cybercriminals seeking to disrupt established systems and processes for financial gain. This took the form of ransomware attacks and other forms of network intrusion and manipulation.
One-eightieth of the 500 CEOs polled by KPMG in 2021 stated cybersecurity risk posed the greatest threat to their company’s growth over the next three years. That’s a big shift in perspective considering that just six months earlier, only 10% of CEOs were saying the same thing.
This paradigm change has been continuing at a quick clip as one high-profile cyber attack follows another to keep the topic of security at the forefront of the boardroom and the C-suite.
As a result of the extensive difficulties encountered this past year, 69% of CEOs said they have accelerated the development of new digital business models and revenue streams. This is why 52% of respondents stated they will prioritise data security measures in 2018.
Spending on cybersecurity is expected to increase by double digits every year for the foreseeable future, with Cybersecurity Ventures projecting that spending would reach $458.9 billion in 2025, up from $262.4 billion this year.
Which industry spends the most on cybersecurity?
The amount of money allocated to cyber defences is skyrocketing. That probably doesn’t come as much of a surprise to anyone who has been keeping up with news about social engineering assaults, malware, ransomware, and hacking in general. Over the 15 years between 2004 and 2017, the cybersecurity market increased in value by a factor of 35, reaching over $120 billion, as reported by Cybercrime Magazine. Is there any way to tell which sectors are investing the most in cybersecurity? And here are some more fascinating projections and statistics:
Principal Economic Sectors (Source: Deloitte)
Financial: $4375 Annually Per Employee
Service Providers: $3266
Retail/Other Financial Services ($2348)
How do you justify cybersecurity budget?
Expend less on things that aren’t really necessary. This is the first and foremost rule of developing cybersecurity funding proposals in the modern era.
No one in a position of authority in the security sector wants to waste time and resources on experimental solutions. They need concrete, measurable steps to take to reduce the risk of their cybersecurity spending plan failing. And here is how you may guarantee a fruitful presentation of your cyber security budget plan:
Maximize the effectiveness of your current cybersecurity solutions. When it comes to cyber defence, more is not always better, and a large number of highly trained personnel is required to effectively manage all available resources. Using a plethora of different tools, many of which perform similar functions, is wasteful and will not impress your superiors. For this reason, it is crucial to learn all you can about your equipment and use it to its fullest potential.
In order to free up your analysts to focus on actual threats, you should implement security orchestration, automation, and response technologies. These will improve your standard operating procedures by orchestrating all the other tools in streamlined workflows. The automation of mundane operations allows you to free up your analysts’ schedules and provide a greater return on investment (ROI), both of which are highly sought after by C-suite security executives.
The major advantages of the investment should form the backbone of your cybersecurity budget request. Prioritize the investment’s return on investment by thinking about the company’s financial stability and proving to the security executives that you’ve explored and used all of the options available to you.
According to estimates from Juniper Research, the worldwide cost of cyber crime would reach over $2.68 trillion AUD by 2019, over four times what it was in 2015. The increased digitization of both personal and business information has contributed to this.
Evidence like this should convince you that cyber defence is an area where you cannot afford to cut corners. However, if you’re a small or medium-sized business with limited resources, you almost certainly have some budgetary limits, which means you have to prioritise your spending.
If you follow the approach provided here, you should be able to protect yourself from typical threats without spending a fortune ad you should know the cyber security basics. You can increase your return on investment and stretch your budget farther.
Photo by Anna Shvets