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The Importance of Data Security in the Electronics Industry

With a large number of employees, often selling products directly to customers, but also part of global supply chains for bigger organizations, electronics companies collect and process sensitive data on a massive scale. The sensitive data they collect includes personally identifiable information (PII) and financial data, but also industry-specific intellectual property (IP) such as blueprints, schematics and patents. As such, they are a veritable data goldmine for hackers and are vulnerable to malicious insiders and industrial espionage.

In the electronics industry, trade secrets, in particular, pose a big data security challenge. Innovation is often at the heart of successful electronics businesses, and having their intellectual property stolen by competitors or departing employees can spell disaster.

Cybersecurity as a business necessity

Most electronics companies must now produce evidence of their cybersecurity readiness during supply chain negotiations, contracting, or quality and payment terms agreements. Some sectors now require all companies in their supply chain to comply with existing international standards or frameworks developed specifically for that field.

This is the case for all contractors or subcontractors of the United States Department of Defense (DoD). An estimated 300,000 companies that do business within the Defense Industrial Base (DIB) supply chain need to obtain a Cybersecurity Maturity Model Certification (CMMC) to be allowed to bid on, win or participate in a DoD contract.

In Germany, automotive group Verband der Automobilindustrie (VDA) developed an Information Security Assessment (ISA) based on international standards such as ISO/IEC 27001 and 27002. The VDA then set up the Trusted Information Security Assessment Exchange (TISAX) to act as an assessment and exchange mechanism through which companies can submit ISA compliance audits. All companies part of the VDA’s global supply chain must present a valid TISAX assessment to obtain a contract within the German automotive industry.

Legal obligations

Beyond these industry-specific regulations, electronics manufacturers must also protect the personal data they collect and process from customers and employees. Such data is protected under laws like the EU’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Any company accepting credit card payments must also comply with the Payment Card Industry Data Security Standard (PCI DSS), which enforces the protection of payment systems from breaches, fraud, and theft of cardholder data.

Failure to protect data and grant data subjects their rights can lead to massive penalties. European Data Protection Authorities (DPAs) can fine organizations as much as $22,600,000 or 4% of a company’s annual global turnover for GDPR noncompliance. Under the CCPA, penalties can reach $750 per consumer per incident, but parties affected by a data breach also have a private right of action.

Using Data Loss Prevention to protect sensitive data

One way electronics companies can protect sensitive data is by using Data Loss Prevention (DLP) solutions. While standard cybersecurity solutions protect company networks and devices, DLP products focus on the protection of sensitive data directly. Using predefined profiles for widely protected categories of data such as PII, IP and financial information, but also for compliance with different regulations such as GDPR, PCI DSS and CCPA, DLP tools can apply data protection policies companywide.

Solutions such as Endpoint Protector also allow companies to customize sensitive data definitions using keywords specific to their business and custom content dictionaries. In this way, electronics manufacturers can easily tailor data protection to their needs.

Once sensitive data is defined, DLP solutions use contextual scanning and content inspection to search for it in over a hundred file types and monitor and control its use and transfer. Electronics companies can thus prevent employees from stealing or accidentally sharing sensitive information via insecure channels such as personal emails, messaging apps, file sharing and cloud services. DLP solutions can also block sensitive data from being copy-pasted or printed.

By monitoring data transfers, electronics companies can also improve their internal security mechanisms by identifying bad practices among employees and weak links in existing data protection policies. DLP solutions also automatically report and log any attempted policy violations, helping companies discover which employees might attempt to steal data or need additional data security training.

Removable devices as sources of data loss

While the internet has become the most popular way to transfer files in recent years, removable devices have remained a constant source of data loss in the enterprise. USBs in particular, due to their size, can be easily misplaced or stolen and are easy to hide. Insiders often use USBs to exfiltrate data when they leave a company, but USBs can also be used as an infection tool to propagate malware within a company network by malicious agents.

DLP solutions can also support electronics companies in dealing with this problem. Many come with device control options that allow companies to limit or block the use of peripheral and USB ports and Bluetooth connections. By restricting their use to trusted devices, companies can always identify which employee has used which device at what time for sensitive data transfers.

An additional step that electronics manufacturers can take is to use enforced encryption even for trusted devices. This means that any sensitive data copied onto removable devices will be automatically encrypted. Should a device be lost or stolen, no third parties will have access to the sensitive data stored on them without the decryption key.

Cross-platform cybersecurity

Another challenge electronics companies face is that most run multi-operating system networks. While it might be tempting to disregard the security needs of macOS or Linux running machines because their architecture makes them harder to attack, electronics companies must realize that insider threats remain the same for all OS as perpetrators already have access to work computers. Whether they aim to steal data or might lose it through negligence, employees are often the weakest link in a company’s cybersecurity strategy.

Therefore electronics companies must consider data protection software such as DLP that offers the same features not only for Windows but also other OS that might be part of their networks such as macOS and Linux.

Finding a truly cross-platform solution can be a daunting task as many products specialize in one OS and offer only a stripped-down version of their solution for other operating systems. Companies should therefore choose products that offer feature parity for all OS in their network to ensure data protection remains the same across all devices in the company network.

Frequently Asked Questions

What are the major security threats for electronics companies?

Electronics companies are vulnerable not only to conventional cyberattacks executed by outsiders but are also exposed to industrial espionage and malicious insiders. Through phishing and social engineering attacks, employees can be the entry point for cybercriminals into a company network. In the electronics industry, in particular, malicious insiders looking to sell confidential information or take intellectual property with them when they leave the company represent a high risk.

What types of data do electronics companies have to protect?

Electronics companies collect massive amounts of sensitive data. This includes personally identifiable information (PII) protected under data protection legislation such as the EU General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), credit card information which falls under the incidence of the Payment Card Industry Data Security Standard (PCI DSS), but also industry-specific intellectual property (IP) such as blueprints, schematics, and patents.

What is CMMC compliance?

The Cybersecurity Maturity Model Certification (CMMC) is a new framework for protecting Federal Contract Information (FCI) and Controlled Unclassified Information (CUI) for all contractors or subcontractors of the United States Department of Defense (DoD). CMMC certification became a requirement for DoD Requests for Information (RFIs) as of June 2020. This means that, in order for a company to be eligible to bid on, win or participate in a DoD contract, they must have a valid CMMC certification, or they will be barred from the contract. An estimated 300,000 companies that do business within the Defense Industrial Base (DIB) supply chain need to comply with CMMC.


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