Cyber security consistently ranks as one of the top 3 concerns worrying organizations that are considering investment in IoT or digital transformation projects.
Spending on cyber security has surged in recent years, driven by major trends including the rise in ransomware attacks, a series of high-profile breaches and the massive security challenges posed by the transition to more remote work and the accelerated push for digital transformation.
Memoori’s report estimates that in 2021, global revenues for smart building cyber security hardware, software and services reached $4.33 billion, and we expect the market to achieve a compound annual growth rate (CAGR) of 12.2% over the next five years, rising to a combined value of $8.65 billion by 2027.
A significant finding from the research is that rising levels of cyber risk posed by IoT devices and connected smart building systems is having a significant adverse effect on building owners’ ability to effectively insure their assets.
There has been an increase in the number of insurers that specifically exclude cyber events that affect digital building systems, such as HVAC, lighting, elevator, parking, and access control, from their policies. The latest policy from Allianz Engineering for construction and power, for example, explicitly excludes coverage for loss, damage, legal liability, additional expenditure or cost consisting of or in consequence of cyber events.
“Most of the industry is probably self-insuring and does not know it, while at the same time doing very little to mitigate the actual risks,” Rob Murchison, principal at Intelligent Buildings, told Memoori.
For the implementation of any new technology, cyber security needs to be considered throughout the design and build process, embedding the right security/privacy controls and risk mitigation solutions at each stage of development.
Meeting the latest cyber security standards and getting IoT products officially certified can provide a clear competitive advantage for vendors when tendering for new business.