By ECI | Tuesday, May 23, 2023
Anytime a company falls short on compliance, it’s also falling short on opportunities to reap significant cost savings. This message can sometimes get lost as firms typically spend most of their time focusing on compliance in terms of strict rules to follow, and fines or penalties to avoid. But a more compliant operation can actually drive new revenue streams.
In this second installment of ECI’s 100% Compliance Playbook blog series, let’s lean into how 100% compliance can help unlock new revenue and generate value as fringe benefits from a more well-run, highly-compliant operation.
Compliance Gaps Cut into the Bottom Line
Poor compliance costs a business far more than just regulatory fines. That’s because compliance gaps typically reflect underlying security gaps that increase the chance of both intentional cyber-attacks and inadvertent data breaches – either of which translates into additional hits to the bottom line such as higher insurance premiums, lost customers from reputational damage and other negative financial impacts.
The costs of poor compliance are magnified for financial organizations. Such companies tend to have highly sensitive accounting, PII and portfolio data that are particularly rich targets for ransomware or exfiltration. Financial firms also tend to move a lot of money, meaning there are more systems that malicious actors can penetrate for high-value exploits – such as hijacking an accounts payable system to process bogus invoices, initiating unauthorized wire transfers or taking other action that siphons money directly away from the bottom line.
All the while, poor compliance is associated with sub-standard operational conditions that can bring on latency or a system outage – not a trivial concern considering how a typical outage can cost an enterprise more than $300,000 per hour, with some outages costing between $1 million and $5 million per hour.
100% Compliance Generates Value and Cost Savings
Whereas partial compliance efforts only deliver partial protection from such costs, an organization that is 100% compliant not only avoids these unnecessary financial hits from fines, breaches and downtime – but can actually create new pathways for cost savings and value generation. For starters, we mentioned higher insurance premiums when compliance falls short. The flip side of this is the substantial savings in cyber insurance when the organization can demonstrate exceptional compliance – driving premiums down by up to 25% or more.
The 100% compliant organization also sees substantial workforce-related cost savings. Research shows compliance failures contribute to employee turnover, especially in cybersecurity, creating what Gartner calls a vicious cycle where “compliance violations drive away the very people organizations need to detect and prevent” compliance-related pitfalls. A 100% compliant organization avoids this downward spiral, thereby saving substantial recruiting and training costs and keeping highly-skilled employees from leaving the organization.
Let’s stay on the topic of the workforce for a moment to see how the cost savings and value generation from 100% compliance are magnified further when organizations team with an experienced MSP partner to maximize the benefit. Even the best-run companies suffer some degree of turnover in their IT staff, and in-house skills can be limited if the core business is not devoted to security. An MSP partner specializing in financial sector security and compliance helps clients fill any skills gaps and eliminate the recruitment-training-turnover cycle for security and compliance staff altogether.
The right MSP can also give you the benefit of cheaper access to better information. For instance, buying an individual subscription to a high-quality threat feed can end up costing $8 per endpoint or more – whereas an MSP can leverage the economy of scale to access the same feed and share client-specific intel for as little as $1 per endpoint. All of these examples show how an organization that is 100% compliant can prevent the vast majority of unnecessary negative financial impacts and actually create some positive ones.
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