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SASE and the Forces Shaping Digital Transformation Part 3: Government and Industry Regulations, and Global Social and Economic Forces

Nov 18 2020

Force 5: Government and Industry Regulations

Regulatory authorities are still trying to catch up with cloud computing let alone the revolution that business digitalization is causing as there is no longer a data center to audit or a firewall log to review. 

Cloud Impact on Regulations

As the cloud reduces physical perimeters for organizations, the cloud also reduces and blurs the digital divide between countries and nations. For many organizations, knowing where their data is located should be a fundamental requirement, yet for many, it’s not always obvious. Responding to a government or a regulator request that our data “is in the cloud” is not perhaps the correct response. Instead, the regulator has made it clear in recent data protection law revisions, such as the EU GDPR, that organizations must know where their data is located. It is a legal requirement and as we see updated regulations introduced across the globe, this requirement will be mandatory for most organizations.

Geolocation Impact on Regulations

Not only is geolocation of the data a requirement but also an understanding of why the organization has this data, how long they can retain, what organizational and security controls are required, and what agreements are in place to transfer this data cross-border to other data controllers and data processors. These are all questions the organization should be able to easily answer. As we see a consolidation of these requirements, we also see an acceleration in consumers being aware of their rights under new data protection and privacy Laws. GDPR, LGPD, CCPA, and POPIA are just some national or state examples whereby the national authorities have made it clear that consumer data protection is critical and they are willing to take action against even the largest organizations that do not take their obligations seriously.

Across the globe, countries and unions have applied aggressive mandates to control and protect data in and out of the country. For these countries, cross border connectivity must be controlled with organizations relying on valid agreements to be in place. The complexity of the rules in place continues to impact both global data protection and security teams that need visibility and control over their network and systems and to not run foul of these laws. For many of these laws, there is no simple answer as rules and guidelines continue to be developed to best support the government’s intentions to support both their economy and their trade arrangements.

Recommendations to best manage these regulatory minefields include mapping the organizational data flows to truly understand where your organization may need to deal with these issues before they negatively impact the organization. Understanding where employees connect from and to cloud services, as an example, will help with maintaining a cross-border inventory of the locations that may need additional control and/or analysis. Sharing this information will provide greater visibility across the whole organization and can help support legal, risk, and audit teams in their understanding of the requirements. Building a strong coalition alongside the security team that factors into the location variable that cloud computing brings is a good first step to manage these forces.

Force 6: Global Social and Economic Forces 

A security strategy should also be implemented to be aware of outside influences, such as global social and economic forces. Employees may not always give a second thought to these forces that may influence their favorite collaboration application. How would they know that they are using storage where the provider has terms that allow for this data to be used for secondary purposes? It is so easy to sign up for a new application completely unaware of the potential ramifications. Another aspect is the use of this data to train existing algorithms that can be used to enhance an understanding of behavior. All good vendor assurance and third-party risk assessments should uncover the potential of this, however, if the organization has embraced an acceptance of shadow IT, who is responsible for these checks and balances?  These forces and influences should be considered and embedded into a strategy focusing on protecting both the employees from misguided information and to protect the organization from potentially losing value from their data.

The Shift in Security Budgets

The movement to cloud applications is also having a major impact on investment dollars of security budgets.  By 2024 investments in cloud security will shift from the current ~20% of the budget to over ~60% of the security budget. Major investments will be moving away from on-premise appliance-based Secure Web Gateways (SWG) to software-based Next Generation SWGs that combine the functionality of data leakage prevention (DLP), web security, and Cloud Access Security Broker (CASB) into one platform. When implemented inline, the technologies can monitor and protect the information flowing to and from all critical business systems.  

Global Events

Often global events will impact the security strategy in unforeseen ways.  The COVID-19 virus made almost every business continuity plan obsolete. Prior to COVID-19, if you went to your executive team and said “I want to create a plan with enough secure network capacity, and mobile endpoint security to allow for the entire workforce to go remote all at once” you would have been laughed out of the office. Now that a global remote workforce is a reality, better security organizations are ramped up from a capacity perspective and quickly redoing their network and endpoint security control structures to enable visibility and control for their remote workers.

Gig Economy

Outside of the pandemic, the economic forces have been changing for the past few years since the last financial crisis. Organizations have seen the rise and value of the gig economy which is based on flexible, temporary, and/or freelance workers that utilize technology and platforms to deliver projects and digital transformation. In the U.S, it’s estimated that over half (53%) of Generation Z workers are freelancers, a number that is projected to grow in the next 5 years across all generations (Source: UpWork). With this growth in mind, organizations are moving away from traditional types of business processes to be more open and flexible and will expect a greater collaboration of tools and technology between permanent and freelance employees.  

This move will push security teams to better understand and deal with a dynamic workforce whereby behaviors will need to be aligned and monitored. Gone are the days of spending time with a permanent team and providing security education and raising security awareness.  Instead, more agile and real-time security awareness training is required that can educate an employee or a freelancer when they make a decision that introduces a high level of risk to the organization. This form of education strengthens the approach and allows for the flexibility of supporting a workforce that could change monthly, weekly, or even daily without damaging their productivity.

Trade Wars and National Conflicts Impact on Security Strategy

The security strategy is also impacted by trade wars and national conflicts. It is not uncommon to see an increase in cyberattacks during and immediately following a trade war or national conflict. In recent history, we have seen this in action in Asia and the Middle East. Shortly after the national event, a significant increase in cyber-attacks followed.  

Whilst preparing for the next event, better security organizations are tracking national events and then adjusting their kill chain analysis, threat watch, and monitoring rules to prepare for and react to the next potential threat. Considerations should be made to the supply chain as although most organizations may not be the direct target, a disruption in the supply chain could have the same effect. Understanding which services your organization consumes and for what purpose and understanding the needs of your organization to supply goods and services to your customers is key.

Want to learn more about the remaining forces? You can read Part 1 here and Part 2 here.

While it is true that 2020 has changed the landscape of cloud security, Netskope was purpose-built for SASE. Let us show you why during our SASE Week! Click here for more information!

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James Christiansen
James Christiansen is Netskope’s vice president of cloud security transformation and leader of the Global Chief Strategy Office. He is focused on enhancing Netskope’s global clients understand the challenges and solutions of cloud deployments by helping drive thought leadership in cloud security transformation.

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