Recent studies show that cyber security spend is on the rise due to the increased risk of digital attacks
The recent cyber attack at the Winter Olympics is just one case demonstrating the increased risk of cyber attacks, currently forcing companies to re-think thier spending on digital security measures.
A recent global survey by professional services firm EYreported that more than 50 percent of companies raised their budgetary spend for cyber security last year.
The report also found that ‘56 percent of respondents have either made changes to their strategies and plans to take account of the risks posed by cyber threats, or that they are about to review strategy in this context.’
These adjustments are mirrored by the projections of American research firm Gartner, which predicts that global security spending will reach $96bn in 2018, an overall growth of 8 percent.
These shifts also come at a time when the General Data Protection Regulation (GDPR) is due to come into force in May 2018, standardising corporate best-practice in Europe for how data is collected and stored.
The recipients of this hike in spend are reaping the rewards, with providers Atos and Thales reporting strong sales for their cyber security services (10.9 percent and 27 percent increase in revenue vs. 2016 respectively). The big 4 consultancy firms, Capgemini, EY, KPMG & PwC, also reported enhanced sales in the sector last year.
According to the Cybsersecurity Almanac, there were 178 M&A transactions in the security market in 2017 – a $20.4bn business. Organisations such as Altran and Thales have acquired cybertech companies to develop their skills base and meet the growing demand for these services.
These profitable circumstances are not just the remit of established companies. They present an opportunity for start ups to benefit as well. Global venture capital investments in cyber security jumped last year to $7.6bn against $3.8bn in 2016, as reported by data analysis company CB Insights, demonstrating the potential for start ups to provide fresh solutions.
Although 76 percent of recipients in the EY survey suggested that only a damaging security breach would prompt them to allocate further resources in defence of this threat, the new regulations imposed through the GDPR provide further impetus to improve and adapt. The regulations mandate companies update their systems in aid of data protection.
Those who cannot adapt to these new regulations could risk fines (up to 4 percent of annual global turnover or €20m through the GDPR), alongside the current costs associated with cyber breach ($141 per lost or stolen record in 2017, according to a survey by IBM).
Although the Federation of Small Businesses (FSB) suggests that up to 90 percent of SMEs remain unprepared for the GDPR conditions, those who can adapt quickly to meet these rigorous requirements enhance their chances of securing contracts. ‘50 percent of SMEs have had cyber security clauses added to new contracts in the last five years,' according to a survey by CybSafe.