With new cyberattacks emerging at a rapid rate, it is essential for auto retailers to protect their dealerships and customer data. According to CDK Global's State of Cybersecurity e-book, less than 50% of dealers are adequately prepared to meet the Federal Trade Commission's (FTC) cybersecurity requirements by June 9, 2023. In addition, only 35% fully comprehend the new ruling, which includes such protection mandates as multi-factor authentication, data encryption and data and systems inventory.
The stakes have escalated in terms of avoiding IT-related business outages, reputation damage and fines for failing to comply with the FTC’s new deadline, according to the e-book, which compiled automotive-specific survey data from dealership personnel to provide peer-to-peer insights to consider when evaluating cybersecurity posture and ongoing strategy for the June 9 compliance.
For example, the main threats that dealers are now experiencing, include: email phishing, ransomware and lack of employee awareness. While auto retailers understand the importance of these cybersecurity threats and are still concerned — 89% of those surveyed say these threats are more important than a year ago — dealers are only 37% confident in their protection.
Ransomware is a major point of focus as hackers continue to hitting increasingly bigger targets. Hackers thrive in a business model that is financially attractive for them: low overhead and high profits, making dealerships a prime target. Looking at the average payouts over time, there is some volatility, although the costs remain high and are an enormous burden for the average dealership.
The average payout for ransomware was $228,125 for the second quarter of 2022, which is an 8% increase from the first quarter. The growing payout amount is likely due to increased work-from-home environments and reliance on distributed networking and applications needed to support this adjustment in employee behavior.
Auto retailers have been doing well with implementing anti-virus software, securing their network, patching and pursuing cyber insurance. However, gaps remain, such as real-time monitoring and formal cybersecurity response plans, which are critical components for the FTC Safeguards Rule. The amended rule includes compliance measures such as securing customer data and implementing a comprehensive information security program.
Dealers must ensure they are collaborating with their software vendors to meet these requirements and have a comprehensive and flexible plan in place for both the IT infrastructure and cybersecurity protection. It is also recommended that dealers have a qualified person or leader to take charge of cybersecurity posture within the dealership. They can consider investing in a chief information security officer (CISO) or Virtual CISO, while working with their legal team along the way.
There's no one-size-fits-all approach to cybersecurity. It is a moving target that requires constant attention. The top concern is no longer if you get attacked, but when. However, having a layered approach to protecting a dealership’s IT infrastructure through proactive cybersecurity measures can help cut through the complexity, including:
- Prevention: 24/7 monitoring, web content filtering, employee training, authentication and compliance.
- Protection: Detect incoming threats, rogue device detection and securing devices and networks.
- Response: Contain threats quickly through recovery, roll back computers to a known good state, remediation, containment and a robust response plan.
A solid plan helps minimize uncertainty, confusion and guesswork. By following the right cybersecurity plan, dealerships can assemble a security team that is ready to reduce threat response time and malicious activities. Staying ahead of evolving technology and cybersecurity will continue to be a crucial component to running a competitive, successful dealership.
More information on the e-book is available here.