Why Is It Essential to Evaluate Cybersecurity Before Mergers and Acquisitions?

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Why Is It Essential to Evaluate Cybersecurity Before Mergers and Acquisitions?

Proactive inquiry and timely response can help mitigate the negative impact that improper cyber hygiene can have on a business acquisition.

Third Party Risk Management (TPRM) is now becoming a significant issue for security teams responsible for the secure integration of third-party infrastructure and system during mergers and acquisitions, given the rise in third-party breaches, along with successful large-scale attacks against big technology providers such as Microsoft and Solarwinds.

Changes in the Mergers and Acquisitions Process

The due diligence process is no longer just about traditional concerns around finance, liabilities, contracts, IT, and key man risk. Cybersecurity too is now becoming a crucial concern during the M&A process.

With limited review time to assess security risks, organizations involved in mergers and acquisitions must focus on specific areas of cybersecurity and threats, particularly those that exist beyond the firewall, if they are to properly identify and manage risks connected with their investments.

Also Read: Time to Move Towards Frictionless Security

In their due diligence process, M&A firms should focus on the following six areas:

Operations Management and Security Engineering

IT is much too often in charge of tasks that require a dedicated security team. In many companies, there is only one IT manager who leads a small cross-functional staff. Even if a corporation has an associated MSSP or MDR vendor, the level of protection required to limit investment risks is still not guaranteed.

Every organization has different maturity levels, but a medium-sized corporation without modern security controls, such as vulnerability management systems and identity and access management (IAM), is often a warning sign that greater vulnerabilities exist that investors and businesses should be aware of. It’s especially concerning when these firms are in charge of protecting PCI, HIPAA, or other regulatory compliance.

Endpoint Security Management

The sophistication of threats aimed at a company must be matched by an efficient endpoint security management solution. Attackers employ end user devices as a key access vector to gain access to corporate networks. Inadequate endpoint visibility and security measures can result in widespread internal breach of vital systems and adversary access to sensitive data. Endpoint systems pose a greater hazard to remote and scattered workforces.

Vulnerability Management

Many businesses continue to struggle with release management, asset inventory, configuration and timely patch management due to a lack of adequate vulnerability management capabilities. The lack of these standard requirements produces a larger attack surface, which is rapidly being exploited by advanced threat actors and should be treated with caution. Knowing what vulnerabilities exist before buying will help figure out what kind of investment businesses need to make to strengthen their defences if the deal goes through.

Also Read: Top 4 Things CISOs Should be Considering, But Aren’t

Network and Data Access Management

Effective network and data access management is a big challenge for businesses of all sizes, especially as they expand geographically and with today’s remote workforces. Many firms are still plagued by legacy network architectures. These businesses are unnecessarily exposing themselves to higher risk due to a lack of dependable segmentation and consistent access controls preventing access to network shares and repositories. Internal attack surfaces are widened by sensitive data, systems, and infrastructure.

Incident Response Management

Organizations frequently lack incident response management capabilities and face challenges integrating new technology, improving monitoring, and establishing playbooks and processes. The maturity and experience of an organization with incident response management is frequently used as a litmus test for its overall security posture and capacity to respond to existing and future threats

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