Evaluating Data Security Needs After a Merger or Acquisition
Introduction
Mergers and acquisitions can create opportunities for companies to grow their businesses and expand into new markets. However, they also introduce significant data security risks that must be evaluated and addressed. In this article, I will discuss the data security implications of mergers and acquisitions and provide guidance on how to assess and strengthen data protections during these complex business transactions.
Assessing the Expanded Data Environment
A key priority is gaining a comprehensive understanding of the new data environment created by the merger or acquisition. This includes identifying:
- All systems and databases that now store or process company data
- The type of data contained within these systems
- The security controls and policies in place to protect the data
- Any regulatory compliance obligations associated with the data
Conducting a thorough data inventory and assessment is essential to reveal any gaps or risks that need to be resolved.
Key Questions to Ask
- What data systems from the acquired company will be integrated with existing systems?
- Will any duplicate platforms or databases be consolidated?
- Does the acquired company handle sensitive customer data or proprietary information?
- Are there any new data regulatory compliance requirements?
Documenting all data storage locations, flows and controls is crucial to ensuring data protection needs are fully addressed.
Evaluating Security Protocols and Procedures
With a view of the expanded data landscape, data security protocols and procedures must be evaluated. Key areas to examine include:
Access Controls
- Are access controls and user permissions configured appropriately for all integrated systems?
- Is access to sensitive data limited to employees with a legitimate business need?
- Are processes in place to revoke access when employees leave the company?
Data Encryption
- Should encryption levels be strengthened given the increased volume and sensitivity of data?
- Is customer data encrypted both at rest and in transit?
- Are policies in place mandating encryption across all platforms and devices?
Security Monitoring
- Are data security logs aggregated centrally across all systems?
- Are monitoring tools in place to detect potential unauthorized access attempts?
- What security event alerting and response protocols are in place?
Third Party Risk Management
- Do any third-party vendors handle or have access to company data?
- Are vendor risk assessments conducted to confirm data security postures?
- Are vendor agreements updated to reflect expanded data protection requirements?
Providing Ongoing Data Security Training
With expanded staff and systems from an acquisition, providing regular data security training is essential to maintaining strong defenses. Training should address:
- Company data security policies and protocols
- Secure password usage and phishing threat detection
- Preventing unauthorized data access and storage
- Proper data handling procedures for sensitive information
Ongoing education and awareness helps embed positive data security practices company-wide.
Centralizing Data Security Ownership
Clearly defined data security ownership and governance across the integrated organization is key to ensuring consistent and effective controls. This may involve:
- Appointing dedicated data security managers
- Forming a data governance committee to create unified policies
- Designating data protection coordinators within each business unit
Defining security roles and responsibilities provides clear oversight as the organization adapts to its new data environment.
Conclusion
Mergers and acquisitions present sizable data protection challenges that require thorough evaluation of new systems, controls, protocols and training needs. By taking a methodical approach to assessing and strengthening data security, organizations can help minimize risk and safeguard critical information during times of expansion and change. Maintaining vigilance over evolving threats and adapting security plans accordingly will continue to be essential for ongoing data protection success.
