13 February 2020
With cybersecurity becoming a problem for even the most sophisticated of companies, defending your system is an important topic and a large and complex market. Whether BigTech firms, Governments or individuals, no system can be seen as fool-proof, which presents a growing need for cyber security technology. The cyber security market is worth circa £140bn globally, and is growing fast as the digital economy expands.
Protecting what you have
After defeating Harold on the open battlefield, William the Conqueror defended his new kingdom by building around 500 castles across England and Wales during his reign. He understood the need to protect and secure what you have against those that want to take it away.
The new crown jewel of our time, that has created the largest, most powerful companies in history, is data, more specifically our data. Protecting our information, as well as preventing a siege on company data, is why cyber security should be a priority, and the most prized kingdoms are under daily attacks.
Breaching the castle walls
Whatever system you put in place may serve you well for a period of time, but it will eventually become vulnerable unless fortifications are improved. Any castle and fortification can be breached by a determined and resourceful foe, but leaving the drawbridge down and the moat empty will clearly leave the inhabitants and jewels inside vulnerable and exposed.
Even the most sophisticated companies in the world are being hacked, whether by criminals or nation states. The risk of a cyber-attack is growing with greater use of wireless networks and the rise of IoT and mobile devices. This has increased data vulnerability, and as this has ramifications for national infrastructure, it should mean that cyber security becomes a central part of an organisation’s function.
The total number of reported cyber security incidents continues to increase with cyber-crime costs reaching £4 trillion globally. There have been numerous examples, from Facebook’s WhatsApp, with implants of malicious code allowing access to user’s phones (as seen in the alleged hack on Jeff Bezos phone), to large corporations, with British Airways’ loss of financial and personal data of its customers. More recently, we saw this at Travelex, where hackers reportedly held Travelex systems to ransom by encrypting digital files, demanding £4.6m to unlock the data.
National and global implications
No government is immune to these implications for national security. The UK government recently approved the supply of equipment by Chinese telecoms firm Huawei for the UK's new 5G data network, despite warnings of a security risk. This puts them at odds with the US, which wants its allies in the "Five Eyes" intelligence grouping - the UK, Canada, Australia and New Zealand - to exclude the company. Australia has already said it is siding with the US, which last year blocked its networks from using Huawei's 5G equipment.
The Western Allies relationships have become strained, as they argue on the technicalities surrounding the interface between ’the core’ and ’the edge’ of 5G infrastructure, and the risk of a potential hostile nation state being able to intercept data, or worse, having the ability to disrupt or even shut down core infrastructure systems.
The contentious issue is actually whether the separation between the core and the edge will disappear, and whether you can really ever layer in sufficient protection around the core infrastructure to keep it truly secure.
The weakest link
Taking a step back and returning to the Normans, the arguments around how to prevent your castle being sacked is not just the protection you put in place to defend against an enemy’s army. It also includes anyone that uses the castle; whether it’s the Lord and Lady, the guards and servants, citizens or the local farmers bringing their goods to market all present a risk to the fortified system.
Therefore, the whole system needs to be considered. Does the castle have sufficient guards and night watchmen monitoring the extremities, have your craftsmen built sufficient defences and the stone masons strong enough walls, are your citizens well drilled on what to do if there is an attack, and are you aware of potential tricks to gain access inside the fortified defences.
From a business or institution perspective the analogy is the same. There is a risk of a cyber-attack via your staff, your users and interface, but also from your supply chain. All interactions present vulnerabilities to the system and, at the end of the day, you are only as secure as your weakest link.
However, to live in any environment presents risk, and to protect civilians, commerce and life-style requires new technology and investment. Cyber security should be a key consideration and an integral part of every single organization, not just large commerce, but schools, colleges and local authorities are just as vulnerable to ransomware.
No excuses to shoring up defences
With cyber criminals not subject to national risk, governments across the globe have gradually recognised the need for joint collaborations and initiatives to counter frequent breaches and attacks. On a more local level, there is a strong need to protect businesses and institutions from a wide range of cyber threats, with increased emphasis on data security, protection and an improved stance on security.
Although no system can be fool-proof, the reputational damage and fall-out from lax systems and the reaction and steps taken after a security breach can minimise the damage rather than exacerbate an already difficult situation. Hence, investment in up-to date processes (stronger fortresses), and bringing on board specialist outsource providers (guards) can at least prevent or minimise the fallout of a security breach, with only the more sophisticated and determined criminals able to penetrate your castle.
Get in touch
If your company is innovating in technology, contact UHY for advice on MBO, Exit Strategy, IPO, R&D tax credits, funding and general business advisory. We can support you whether your business is large or small, at the beginning of its lifecycle or considering strategic options; we have the technology professionals that understand a changing and challenging environment.
Please contact Rob Starr, Lead Advisory at UHY Corporate Finance Limited, Technology Sector, if you would like to know more.
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