Digitalizing energy operations, without falling victim to cybercrime
October 2021 by Speedcast
As businesses across all sectors digitalize operations, they open themselves up to the possibility of cyberattacks. The energy sector has been a big target for cyber criminals in recent months, with estimations that an attack is attempted every 39 seconds. Energy operators must make cybersecurity a priority to avoid trillions of dollars in losses, thanks to the increasing sophistication of attacks.
Financial impacts can be devastating
IBM’s Cost of a Data Breach Report 2021 shows that this year alone, data breaches across all sectors cost upwards of 4 million US dollars – the highest amount recorded in 17 years. By 2025, it is estimated that cybercrime damages will reach $10.5 trillion USD every single year. On top of potential ransom payments, there are a host of secondary impacts that lead to devastating financial losses.
While each sector is unique with regards to the specific impacts of a breach, those in the energy sector rely on industrial control systems to manage vast amounts of complex infrastructure grids like power distribution, oil transport pipelines, wind and solar power farms, and oil rigs. These systems manage a multitude of connected devices, like power transformers, pumps, valves, and sensors. Each component plays a vital role in the operating system, which means if one component suffers a breach, a much larger portion of the business could suffer costly downtime. Downtime means the operators are not providing for their customers, and profits are lost as a result.
Data breaches not only put sensitive information at risk but can also lead to high costs through third party claims, and lawsuits following breach of information. Additional fines for breach of data and privacy laws mean a leak of information via a cyber attack can be very costly for businesses. What’s more, the damage to a company’s reputation following a data breach can have lasting impacts on their customers, investors, and long-term operations.
A sector susceptible to attack
But why is the energy sector particularly vulnerable when it comes to cyberattacks? The sheer number of connected components means more entry points for attackers to take advantage of and use to infiltrate the supply chain. As more of these components become connected with the increasing digitalization of operations, new opportunities arise for hackers. The lucrative nature of energy production is also attractive to hackers. While larger companies may have more sophisticated cybersecurity systems, once infiltrated, attackers can demand a much larger sum in comparison to smaller corporations. Attacks on energy companies also tend to make mainstream headlines, because of their high-profile nature. This puts the company at higher risk of reputational damage, and potentially more likely to pay a ransom to make the problem disappear under the radar.
What can corporations do to protect themselves?
Operators should consider investing in cybersecurity solutions and precautionary steps before an attack occurs, instead of being forced to react to security issues after they arise, and the damage is done. This not only saves significant costs in the long run but avoids critical reputational damage that can follow an infiltration or data breach. When choosing cybersecurity infrastructure, operators should implement a solution that firstly assesses the current security architecture, to evaluate design, implementation and operation. One size will not fit all; every company will have varying areas of strength and weakness when it comes to cybersecurity.
By baselining their organizational capabilities, the company can use the findings to define a cybersecurity strategy and implement an appropriate cybersecurity program that supports the prioritization of near-term investments in non-technical areas, the benchmarking of progress over time and trend analysis. In doing so, the company will be well positioned when seeking cyber insurance options.
Solutions which take complex compliance and regulatory requirements into account should also be implemented. There is no point in paying for a cybersecurity solution that keeps hackers out, if it does not meet regulations, and must quickly be removed. A provider with an in-depth knowledge of laws and regulations will enable energy suppliers to choose a solution which is suitable not only now, but well into the future.
Another vital factor to consider is the cost and complexity of the solution. Those that require extensive investment, resources, and expertise are not a sustainable long-term option. With a significant skills shortage in the cybersecurity industry, companies are unlikely to have experts already on their pay roll. As a result, cybersecurity solutions that require little to no maintenance once installed are the best option for operators. While implementing a cybersecurity solution will save operators costs on ransom payments and reputational damage, they should still opt for a solution that does not require extensive costs and internal resources. That is how a high level of cybersecurity can remain financially viable into the future.
Comprehensive assessment services like Speedcast’s CyberInsights solution, not only identify areas of vulnerability, but offer operators sustainable architecture that will secure their operations going forwards. As the costs of cyberattacks continue to rise, and hackers become more sophisticated, this is how energy companies will save trillions of dollars in losses.