International business has become indispensable for nearly all companies, but it also introduces a set of innovative complexities. As products or services containing computers or internet connectivity, which encompasses almost every offering, traverse international borders, the emergence of cybersecurity risks becomes evident. Heightened apprehensions regarding the potential exploitation of digital products by foreign states or corporations for data privacy breaches, vulnerability planting, or other malicious activities necessitate subjecting digital products sold across borders to increased scrutiny and regulatory controls. Consequently, such products may face unwarranted bans from host governments. To navigate and mitigate these risks effectively, every transnational company must incorporate robust risk management strategies into its digitalization approach.
Failing to properly account for these risks means courting disaster. For instance, TikTok, along with 58 other Chinese-created apps, was banned completely in India by MeitY on 29 June 2020, with a statement saying they were “prejudicial to the sovereignty and integrity of India, defence of India, security of state, and public order”.
Concerns surrounding cybersecurity threats in international business have led to increased scrutiny and controls on products and services that contain computers or internet connectivity crossing borders. There is growing anxiety that foreign states or corporations may misuse digital products to compromise privacy data, introduce vulnerabilities, or cause harm, resulting in potential bans by host governments, regardless of fairness. Consequently, every transnational company’s digitalization strategy must incorporate effective risk mitigation and navigation strategies to address these challenges.
Key areas to watch in case of Cross-Border Businesses:
Geopolitics: Transnational digital products encounter uniform cybersecurity risks, but governments’ diverse approaches lead to fragmented rules and risks for international businesses. Government decisions are influenced by trust, impacting regulations and responses based on their capacity to handle cybersecurity risks, involving laws, technical capabilities, organizations, awareness campaigns, and partnerships.
International Cooperation: Establishing partnerships and information-sharing agreements with relevant cybersecurity agencies and organizations in other countries.
International Data Privacy: For data privacy compliance, businesses navigate and adhere to diverse regulations in each country. This involves robust policies, customer data security, and proper consent management. Non-compliance can lead to severe consequences.
Global Supply Chain: Challenges in supply chain security for international businesses include managing diverse vendors, data protection across borders, varying cybersecurity standards, and potential vulnerabilities in global production and distribution processes.
Cloud Security: Ensuring the security of data stored and processed in cloud environments, especially when data crosses borders.
Remote Workforce Security: Securing remote employees and their devices as international businesses often rely on a global workforce.
Cyber Insurance: Considering cyber insurance to manage potential financial losses due to cyber incidents.
Formulating a proactive approach: Companies require a robust cybersecurity governance plan for transnational digital products. Executives should seek competent directors to reinforce capabilities.
- Build an Effective Cybersecurity Governance Culture
- Embrace political acumen, project cyber-resilient image
- Demonstrate readiness to venture and recalibrate
- Empower host governments autonomously
- Enhance negotiating leverage