Cybersecurity in the Mid-Market: Insights from Chris Arrendale, Founder of CyberData Pros (Part I)
Key Takeaways:
- CDP was established to address the growing needs in cybersecurity, compliance, and data privacy.
- Mid-market clients often worry about data security, regulatory compliance, and the risks posed by employee actions.
- Continuous training on cybersecurity is crucial as employees are often the weakest link in security protocols.
- Companies face difficulties keeping up with evolving regulations, particularly in states with stringent compliance laws.
- Cyber incidents can lead to significant financial losses; a ransomware attack previously cost a competitor $300 million.
- The integration of AI and evolving threats necessitate ongoing adaptation and vigilance in cybersecurity practices.
Introduction
In today’s rapidly evolving digital landscape, cybersecurity has become a critical concern for businesses of all sizes. However, mid-market companies often find themselves in a unique position – too large to ignore cybersecurity threats, yet lacking the extensive resources of enterprise-level organizations. To gain insights into this crucial area, we sat down with Chris Arrendale, founder of CyberData Pros, a cybersecurity consulting firm specializing in mid-market businesses.
The Journey to CyberData Pros
Chris Arrendale’s path to founding CyberData Pros is a testament to the evolving nature of digital security. His journey began with a pivotal conversation with his grandmother, who advised him that success meant attending Emory University and becoming either a doctor or a lawyer. Initially leaning towards law, Arrendale’s career took an unexpected turn during an internship at a medical malpractice defense firm.
“When I interned at a med mal defense firm, I really didn’t like the practice, and I took over their IT department,” Arrendale recalls. This experience sparked his interest in technology, leading him to pursue a master’s degree in software engineering and information technology.
Arrendale’s career progression reflects the interconnected nature of digital communications and security:
- Email marketing
- Deliverability
- Compliance
- Privacy
- Cybersecurity
This natural transition path has shaped his expertise and led to the founding of CyberData Pros three years ago. The company focuses on strategic consulting in data privacy and cybersecurity, offering expertise in various areas including policy development, risk assessments, penetration testing, and management systems.
The Mid-Market Focus
CyberData Pros primarily serves mid-market businesses across various industries, including digital marketing, SaaS, technology, commercial engineering, and international companies. Arrendale explains, “We’ve built this approach to where we’re able to work with a lot of different groups and companies as long as you can explain your business to us in a way that we can understand it and really kind of be part of your business.”
This adaptability is crucial, as effective cybersecurity consulting requires a comprehensive understanding of various business aspects, including HR, finance, IT, and operations.
Engagement Models
CyberData Pros typically engages with clients in two primary ways:
- Fractional CSO or Chief Privacy Officer: Many mid-market companies lack full-time cybersecurity leadership. CyberData Pros fills this gap by providing 20-50 hours per month of expert assistance with security questionnaires, client calls, internal training, and policy documentation.
- Certification Assistance: Clients often approach CyberData Pros when facing pressure from existing clients or prospects to obtain certifications like SOC 2 Type 2 or ISO 27001. The company guides clients through the entire certification process, from preparation to final audit.
Key Challenges for Mid-Market Companies
Data Security and Privacy
One of the primary concerns for mid-market companies is ensuring the security of their data. Arrendale notes, “We don’t know if all the data that we have is secure. We don’t know if the client if the PII, if the SPI, you know, revenue, financial data, trade secrets… How do we know that’s secure?”
This concern extends to access control, data sharing practices, and the potential for information leakage. The consequences of data breaches can be severe, including:
- Regulatory fines, especially in states with strict privacy laws like California
- Reputational damage
- Loss of revenue
- Loss of clients
Employee-Related Risks
Arrendale emphasizes that “the weakest link in your cybersecurity is the person behind the keyboard.” This human element presents several challenges:
- Lack of awareness about potential threats
- Insufficient or ineffective training programs
- Vulnerability to social engineering attacks
- Risks associated with phishing and ransomware
To address these issues, companies must implement comprehensive and ongoing training programs, including real-time phishing tests and simulations.
Supply Chain Vulnerabilities
The interconnected nature of modern business operations means that cybersecurity risks extend beyond a company’s immediate boundaries. Supply chain vulnerabilities can pose significant threats, as evidenced by high-profile incidents like the SolarWinds attack in 2020[1].
Keeping Up with Regulatory Changes
The cybersecurity landscape is constantly evolving, with new regulations and compliance requirements emerging regularly. Mid-market companies often struggle to stay informed about these changes and understand their implications.
The Impact on Revenue
While reputational damage is often the most visible consequence of cybersecurity incidents, the direct impact on revenue can be substantial. Arrendale shared an example of a client whose competitor suffered a ransomware attack, resulting in a $300 million loss.
Ransomware attacks can lead to significant revenue loss through various mechanisms:
- Operational Downtime: When systems are compromised, businesses may be forced to halt operations, leading to lost productivity and sales.
- Data Recovery Costs: Even if a company has backups, the process of restoring systems can be time-consuming and expensive.
- Ransom Payments: Some companies choose to pay the ransom, which can be substantial. However, there’s no guarantee that paying will resolve the issue.
- Long-term Customer Loss: The reputational damage from a cybersecurity incident can lead to customer churn and difficulty acquiring new business.
- Regulatory Fines: Depending on the nature of the data compromised, companies may face significant fines for non-compliance with data protection regulations.
A 2021 study by Sophos found that the average cost of remediating a ransomware attack was $1.85 million. This figure includes downtime, people time, device cost, network cost, lost opportunity, ransom paid, and other factors.
This is part 1 of a two part Thought Leadership interview with Chris Arrendale, CEO of CyberData Pros based out of Atlanta, Georgia. CyberData Pros is consulting and service prover of data privacy and security expertise to help companies spend more time growing their business by establishing a more secure ecosystem.
Learn more about Chris Arrendale here: https://www.linkedin.com/in/arrendale/
Learn more about CyberData Pros here: https://cyberdatapros.com/
