Executives operating in today's intricate business landscape must profoundly understand the multifaceted landscape of cyber, data, and technology risks. In the realm of M&A, the term "Cyber" encompasses far-reaching aspects, including fortifying digital assets against unauthorized access, data breaches, and cyberattacks. While tangible and intangible assets remain vital in traditional M&A transactions, the often-underestimated risk associated with intangible assets, specifically digital assets, is glaring. Data, heralded as the strategic lifeblood of the digital economy, fuels decision-making, personalized customer experiences, and innovation. Strict adherence to data protection regulations such as the General Data Protection Regulation, the California Privacy Rights Act, and the Securities and Exchange Commission is paramount. The Equifax data breach in 2017 remains a stark reminder of this vulnerability. The oversight permitted hackers to gain illicit access, compromising sensitive personal and financial data belonging to approximately 147 million consumers. The Equifax incident underscores the perils of using outdated technology and insufficient security protocols, culminating in severe financial losses and reputational harm. What Magnifies Risk? Managing the intricacies of shadow data and contractual obligations further magnifies these risks. While enhancing productivity, these tools inadvertently pave the way for storing sensitive patient data outside official management systems. Mishandling and insufficient security could transform this shadow data into a liability in a data breach. Collaboration with third-party vendors and partners brings its own set of risks. Failure to ensure stringent security standards and data protection measures can culminate in breaches affecting both parties. Consider a scenario where lax security practices within a retail company's payment processing partner led to a breach, jeopardizing customer payment data and incurring legal and reputational repercussions for both entities. In the context of M&A, data risks span data loss and regulatory consequences, often resulting in fines and legal disputes. Reputation and intellectual property risks emerge from cultural disparities and mismanagement, highlighting the importance of safeguarding IP assets. Balanced Approach Striking a balance between technology and data risks in M&A entails strategically evaluating integration and replacement strategies. A meticulous approach necessitates thorough risk assessment, vigilant monitoring, and proactive risk mitigation. Recognizing the dual nature of data's value and risks and the integral role of technology and infrastructure forms the bedrock of successful contemporary M&A endeavors. The urgency is apparent: Executives must rise to the challenge and take immediate action to grasp the intricacies of data, technology, and infrastructure within M&A. Cybersecurity, compliance, and risk management are not optional components but imperatives for a prosperous future.
This Cyber News was published on www.darkreading.com. Publication date: Thu, 30 Nov 2023 23:19:27 +0000