Technology companies in growth mode face a rapidly changing threat environment.
Key takeaways
Expansion brings increased digital footprints and greater reliance on third-party vendors.
New systems and platforms can bring vulnerabilities if not accompanied by security assessments.
Recent shifts in the global economic landscape, including an evolving tariff environment and international tensions, have introduced new layers of complexity for technology companies focused on scaling up.
For executives and stakeholders at technology companies, these developments are a stark reminder that geopolitical shifts can amplify cybersecurity risks, particularly for companies in high-impact industries like semiconductors but also throughout the tech sector. As trade relationships evolve and regulatory scrutiny intensifies, scaling organizations must account for the direct and indirect effects of these forces on their cybersecurity risk postures.
Technology companies in growth mode face a rapidly changing threat environment. Expansion often brings increased digital footprints, greater reliance on third-party vendors and heightened visibility to malicious actors. In times of geopolitical uncertainty, the risk of state-sponsored cyberattacks, intellectual property theft and supply chain disruptions rises.
The semiconductor industry, for example, sits at the intersection of these concerns. Section 301 investigations, which assess unfair trade practices and set the stage for future tariff decisions, heighten the need for strong cybersecurity defenses as companies navigate the regulatory and economic landscape.
Key cybersecurity challenges during rapid growth
Scaling tech companies often encounter unique cybersecurity challenges that can expose them to heightened risk if not properly managed. Here are some examples:
- Rapid hiring and onboarding may inadvertently introduce access control gaps, leading to potential threats.
- The integration of new systems and platforms—essential for supporting growth—can create vulnerabilities if not accompanied by thorough security assessments.
- Expansion into new markets or geographies may require compliance with diverse regulatory frameworks, such as the General Data Protection Regulation (GDPR), which adds complexity to data protection efforts.
- Resource constraints during periods of fast growth may cause security to lag business objectives, inadvertently opening the door to sophisticated cyberattacks.
Strategies for mitigating cybersecurity risks
To address these challenges, tech executives and managers should consider a multipronged approach to cybersecurity. Actionable strategies include:
1. Implementing robust data protection controls:
Encrypt sensitive data and establish data classification policies to safeguard confidential information appropriately.
2. Strengthening access management:
Adopt least-privilege principles, enforce multifactor authentication and regularly review user permissions to minimize the risk of unauthorized access.However, while the use of cyber insurance is gaining momentum, some executives do not have a full understanding of their coverage. Companies must understand their policies to ensure exposures are addressed. Periodic evaluation of the insurance policy is also needed to account for evolving risks.
3. Conducting regular risk assessments:
Continuously monitor for new threats, especially those emerging from geopolitical developments or changes in the regulatory environment, and update security controls accordingly.
4. Fostering a security-aware culture:
Provide ongoing training to all employees, emphasizing the importance of vigilance and personal responsibility in preventing cyber incidents.
5. Strengthening zero-trust principles:
Especially as scaling tech companies adopt cloud infrastructure solutions, zero-trust security principles will help improve security of data stored in the cloud.
6. Engaging with trusted advisors:
Leverage external teams to identify compliance gaps, particularly during international expansion or in response to standards like GDPR.
In any sector, vigilance around cybersecurity issues is key, but it is especially urgent for tech businesses. As we noted in this 2024 article, breaches at well-known technology companies have been among the most widely reported in recent years. As of late 2023, the U.S. Securities and Exchange Commission began requiring public companies to report “material” cybersecurity incidents within four business days and to disclose annually how they manage cybersecurity—both measures designed to protect investors. Meanwhile, the use of artificial intelligence presents technology firms with great opportunity for innovation but also brings additional cybersecurity risk.
Proactive risk management for the future
As technology companies pursue ambitious growth objectives amid a backdrop of international uncertainty and evolving tariffs, cybersecurity must remain a board-level priority. Taking the steps outlined above can help scaling tech companies safeguard their assets and protect their reputations.
RSM contributors
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