Our world is becoming more digitized every year. The amount of data is growing, and it is regarded not only as just information but a precious commodity. The battle for acquiring correct data, numbers, and statistics is ongoing as it provides organizations with invaluable insight into their operations to outrace their competition and become a market leader proving the best experience to their industry and clientele. However, such success comes with a price tag. There are a variety of factors that determine the final expenses, but where the market stands now creates a situation of a potentially high threshold for new participants. What can we do about it?
Enterprises are not ready for rising costs
Compliance maintenance is a subject of severe issues and expenditures which often go over-the-top.
Ponemon Institute research based on more than 50 multinational organizations and the stakeholders insights found out that the average cost of compliance for those companies was estimated at $5.47 million – a 43 % increase from a previous version of the study conducted back in 2011.
And it’s not the borderline: as non-compliance costs due to the same study reaches $14.82 million on average – 2.71 times more than the cost of compliance and an increase of 45 percent since 2011. With such numbers in mind, logical questions should be asked every time – can your business afford such spending?
With the growing and continuing demand for various data use, the frequency rate of data movement also increases. When the river is becoming wider, the lost ships are harder to find – this means data is becoming more vulnerable to lose and steal.
New and enhanced data protection regulations are developed to prevent data leaks, but the more regulations step in, the more complex becomes the whole thing. Businesses worldwide are challenged not only to launch their operation – but to evaluate if they have the proper budget to implement decent compliance measures. However, an increasing number of threats, permanent need to protect valuable data and reduce long-term perils caused by non-compliance are driving the implementation.
Well, why are KYC solutions so expensive in the first place? Data protection regulations often include a number of requirements that can be costly and complicated to follow. And there are more than a few steps:
- Your company requires licensing
- A need to comply with the General Data Protection Regulation (GDPR)
- Requirements which require implement AI-technology for facial recognition
- Complying Payment Card Industry Data Security Standard (PCI DSS)
- Health Insurance Portability and Accountability Act (HIPAA).
The challenges of compliance and the numerous risks of non-compliance are the main issues for global customers.
No doubt, complying with data protection regulations is expensive, but it’s the only way: sooner or later, non-compliance will cost organizations much more at some point in the future. In the times of cyber breaches when Sony and major brands or top crypto exchanges busts are becoming regular headlines, protecting data is a critical necessity and not a nice-to-have option.
The last years’ increasing rate in the rise of cybercrime and data breaches undoubtedly indicates that most businesses either do not take the problem seriously or just don’t invest enough to win this battle. As this war becomes more and more expensive for companies to go on, a logical consequence would be rising interest from the world companies to implement cybersecurity solutions expenditure & implementation into their business strategy rather than leaving it for the last thing.
Such Regulations likes GDPR, CCPA and HIPAA were set in place to improve the security level of organizations and protect user privacy and security. However, according to the latest Forrester report, only 36% of global security decision-makers say they are fully compliant with GDPR.
Moreover, due to the Statista survey among IT and legal professionals, access to adequate technology tools was a common issue for 36 percent of European and English professionals, respectively.
The results of another survey carried out in the first quarter of 2018 revealed that respondents in the United Kingdom expected costs to rise slightly in the next 12 months, with 62 percent of them giving that answer.
According to other data, expectations, and requirements of customers were the main drivers for the surveyed professionals. The fines or class action lawsuits were a reason to invest in compliance measures only for 39 percent of European professionals and 38 percent of the UK respondents.
Non-Compliance dangers and consequences
The rising cost of fines and penalties increase pressure on businesses to comply with data privacy rules. And in case of non-compliance, aftermaths are severe – businesses are witnessing a major hit on their bottom line as the fines rise and reduced consumer trust affects the overall business.
Recent news includes some of the biggest numbers in fines and restitution.
- FTC hit Facebook with a record-breaking $5 billion fine (9% of company revenue!) and ordered a privacy oversight.
- British Airways faces a record $230 million fine after a website failure compromised the personal details of roughly 500,000 users.
- Marriott International faces a potential £99.2 million ($123.6 million) fine due to failing attempts to protect passenger data after a serious hack.
Such headlines serve a perfect example to others that compliance implementation nowadays is critical as user privacy regulations and laws are not the things even major corporations can neglect – we can witness as large global companies could get under fire both on their bottom line and reputation. And within such a situation, the market survival rate of those companies which lack millions saved on a rainy day to pay possible fines is nothing but a rhetorical question.
Let’s get back to surveys: another 2019 research made by the National Cyber Security Alliance (NCSA) states data breaches can be devastating for businesses. Moreover, 10% of small businesses breached shut down in 2019 and 69% of small organizations were forced offline for a limited time and 37% experienced financial losses.
How to survive and protect your business in the world of security issues
Due to massive online security breaches taking place more often, rising expenditures, neglecting of services and complexity of their implementation, specific services must be used to prevent cyber fraud and breaches and reduce it’s a possibility to minor numbers to prevent data breaches. According to the Forrester report, The State of Application Security, 2018, the spend on application security solutions will more than double over 5 years: from $2.8 billion in 2017 to $7.1 billion by 2023! For now, every dollar spent on compliance services and cybersecurity implementation is a long-time investment aimed to defend from reputation damage and build customer trust.
Existing companies heavily depend not only on software applications to grow their business, but to detect threats before they become a real menace. A well-though risk-based strategy approach to evaluating cybersecurity vulnerabilities can immensely improve one’s company security stand.
However, not all companies operating globally on this market scare away potential clientele with fat price tags which provide a certain halo of unattractiveness. There are security and KYC-providers with a flexible monetary policy. One of such examples is our platform GetID. It was developed as a convenient and top-notch KYC-aggregator platform, which combines innovative technology with many services to deliver the most powerful and accurate application security to protect you before a problem is far from your company’s bay. Utilizing well-though and designed solutions, businesses can get greater visibility into potential vulnerabilities, access to faster, and can address compliance at the cheaper rate at the same time. Having access to different packages, clients can choose particular features they require on priority basis to save costs.
Data compliance field is changing
Digital security requirements are rewriting business strategies in today’s world. Despite the vector this industry might take in the foreseeable future, one cardinal rule must always be taken seriously: nobody but you is accountable for your business security. In the world of rapidly developing KYC-services, which provide decent protection solutions at affordable pricing, neglecting of such opportunities use will result in devastating aftermath sooner or later. Take a wise approach when choosing the strategy and tools to protect your venture and don’t hold back thinking that the overprices solutions make the difference.
Author: Dmitri Laush CEO GetID and idCredit