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A nice overview of the importance of cybersecurity risk management as a corporate differentiator. It’s not just a differentiator, one has no doubt that with the amount of cyber regulation proposed, in development or in force cybersecurity risk management is becoming a baseline for market participation for some industries, in some jurisdictions. By way of example, EU NIS 2.0 will be a requirement for CNI providers and DORA for Financial institutions in Europe within the next 20 months. The SEC proposal will affect firms on U.S markets, irrespective of their geographic location. The DoDs DFARS program is a requirement for defense contractors covered by DFARS 252.204-7012.
Cybersecurity regulatory compliance will be more than a differentiator. Regulatory compliance will be assessed by regulators, the markets, investors and consumers. Cyber regulation being developed across global jurisdictions will affect international trade, for example the proposed EU Cyber Resilience Act, and proposed U.S cyber certification set requirements on ICT, hardware and software vendors to implement cybersecurity prior to market entry; U.S DoD cybersecurity requirements require cybersecurity compliance prior to contract award; the FDA will require medical device manufacturers to implement a cybersecurity program and manage on-going device cybersecurity from October 2023.
This creates a need for the harmonisation of cybersecurity regulations, frameworks and standards, as the above sets different cybersecurity risk management requirements. Effecting enterprise wide risk management and risk transfer; corporate and board member legal and compliance risk; products and service design; cyber insurance; the cost of capital; regulatory capital; shareholder returns and credit risk to name a few.
One wonders if cybersecurity is more than differentiator, it is more likely setting the baseline for market participation.
Ted Dziekanowski
#cybersecurity #cyberriskmanagement #cyberregulation
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