The heavy reliance on technology in today’s data-driven world means that cybersecurity threats must be taken seriously. More specifically, with respect to M&A transactions, a target’s cybersecurity mechanisms have become an important part of the due diligence consideration. Indeed, it is important to have a firm grasp on the nature and extent of a target’s cybersecurity vulnerabilities, the likelihood of a breach, and the procedure in place to remedy a breach, if necessary. These considerations have the power to significantly alter the value of a transaction, or even derail it entirely.
Artificial Intelligence (AI) has immense potential as a solution for cybersecurity vulnerabilities in M&A deals. Generally, M&A deals generate value and as such, understanding vulnerabilities on the acquirer and target sides is important for completion of the transaction. With the common usage of networks and servers to store high volumes of data by corporations, vetting for cybersecurity attacks has become a priority in the M&A due diligence process. In a recent study, IBM reported that the global average cost of a data breach has risen 6.4 percent over a 12 month period to $3.86 million. The average … Continue Reading
Cybersecurity has never been more critical. This growing area of concern has been on the mergers and acquisitions (M&A) radar for some time, and we’ve previously blogged on its effect on the due diligence process, regulatory requirements, and overall acquisition risk assessments. With only 4% of organizations reportedly agreeing that their current cybersecurity strategies had been fully considered, with all risks incorporated and relevant threats and vulnerabilities monitored, it’s crucial to push forward in developing a comprehensive and current cybersecurity strategy to manage risks at all stages of an M&A transaction.
Given the increasing frequency of cybercrime and online security breaches, cybersecurity has moved to the forefront of importance when evaluating M&A prospects. Acquirors want to ensure that they are receiving the full value of what they are purchasing and protect themselves against any possible data breaches that can result in reputational, legal, or financial harm.
A report by the New York Stock Exchange Governance Services surveyed 276 directors and officers of public companies to determine how the growing presence of cybersecurity threats has had an impact on their M&A due diligence process. The report indicates that:
- 66% of respondents include
New cybersecurity requirements for Department of Financial Services (DFS)-regulated entities took effect on March 1, 2017. The New York DFS created these requirements in response to recent or potential threats to sensitive electronic information, particularly financial information and private consumer information. EY’s report provides an overview of the new framework with implications for the affected entities. A main goal is to protect information systems of the affected entities and the non-public information stored in those systems.
The new cybersecurity requirements include indications for the below-noted areas. An annual statement certifying compliance with these requirements must be submitted to … Continue Reading
In 2015, we have seen several important cybersecurity breaches in the industry. Some of them have been extensively mediatized while others remained less known by the general public. Recently, the online dating website Ashley Madison was hacked and the identity of millions of users revealed all around the world. Even more recently, we learned that over 500 million users’ Yahoo accounts had been hacked in 2014 and this news came out shortly after the acquisition of Yahoo by telecom giant Verizon. Can these attacks jeopardize your upcoming transaction? They absolutely can. As a matter of fact, Verizon asked for a … Continue Reading
Gone are the days when the focus areas for banks were largely M&A and growth. In addition to ever increasing regulatory and compliance obligations, banks are grappling with new technologies and innovations that affect the way in which banks interact with consumers.
Payment technologies continue to advance, with improvements in the security of contactless payments and increasing adoption of electronic peer-to-peer payments. Partially as a result, banks have access to more information about their customers’ behaviour, yielding data and analytics that can be exploited across all banking functions. Of course, the collection and use of “big data” dovetails directly into … Continue Reading