Cybersecurity compliance requirements and expertise shortage

Definition

Cybersecurity has become a core compliance requirement, not just a technical IT function. New SEC cybersecurity disclosure rules pushed organizational leaders to manage cybersecurity concerns and compliance teams are increasingly responsible for cybersecurity compliance. For compliance consulting firms, this creates a critical expertise gap: (1) Cybersecurity expertise is expensive and scarce - firms must compete with higher-paying tech/security firms for talent; (2) Many compliance consultants lack cybersecurity expertise, limiting ability to serve clients; (3) Clients need integrated compliance-cybersecurity guidance but consulting firm may only have compliance expertise; (4) Consulting firm must either hire specialized cybersecurity staff (expensive), partner with cybersecurity firms (margin compression), or refer clients away (lost revenue); (5) New SEC rules create regulatory certainty and consulting demand, but time-sensitive nature creates high-pressure engagements; (6) Risk if consulting firm gives inadequate cybersecurity compliance advice leading to breach and client liability. For SMB consulting firms, this is particularly challenging because they cannot afford to maintain specialized cybersecurity staff and lack bargaining power to negotiate favorable partnerships with cybersecurity firms.

Why This Matters

Partnerships with cybersecurity consulting firms, cybersecurity training programs for compliance staff, white-label cybersecurity compliance services, cybersecurity assessment tools and frameworks, specialized cybersecurity compliance hiring

Affected Stakeholders

Owner/CEO, Operations Manager / HR Manager

Related Business Risks