Cybersecurity Practices Affect the Valuation of Your Company

According to a study by Ocean Tomo, intangible assets have emerged as the leading determinant of a company’s value.  From 1975 to 2025, the value of tangible assets dropped from 83% down to 16% while the intangibles went from 17% to 84%.   A company’s value derives from its tangible and intangible assets. Intangible assets include not only patents, trademarks and copyrights but also a company’s reputation and brand value (UBS, 2019).

Cybersecurity factors into the environmental, social , and governance aspects of company valuation.  Supporting economic growth by preserving the benefits of digitization can significantly contribute to SDG (UBS, 2019). Service companies which take payments or deal with large numbers of customers are particularly responsible for keeping the personal data safe under the GDPR rules.

“Cybersecurity ranks as one of the top three concerns for investors and business owners, and the number of cybersecurity incidents is rising by 20%-30% per year,” states UBS in a recent publication (found here), “Globally, the average total cost of a data breach in 2018 stood at USD 3.86 million.”  Companies that will thrive and lead the industry will be those that invest in cybersecurity and employee training related to information security and privacy.