Market Challenges And Opportunities

Phishing Simulator Market Drivers:

Increasing sophistication of phishing attacks: The phishing attacks landscape has evolved rapidly over the past few years. The phishing campaigns have become more targeted, persistent, and harder to detect. Hackers are using advanced techniques such as spear phishing, whaling, and business email compromise scams that are highly customized and evade traditional security defenses. Moreover, the COVID-19 pandemic has led to a further increase in phishing campaigns exploiting the remote working and dispersed workforce. These sophisticated phishing attacks are causing huge financial and reputational losses for enterprises. This is compelling organizations to adopt phishing simulation solutions that empower employees to identify and respond to the latest phishing techniques. For instance, in November 2023, the cyber defense firm Ironscales Ltd. from Israel has unveiled enhancements to its platform that is specifically designed to strengthen protection against the growing trend of image-centric phishing threats, which notably include attacks utilizing QR codes.
Stringent regulatory and compliance requirements: With the increasing frequency and impact of cyberattacks, governance regulations around cybersecurity awareness training have become more stringent. Regulations such as HIPAA, PCI DSS, GLBA, SOX, and GDPR mandate periodic security awareness training, including phishing simulations for employees. Financial institutions like banks need to comply with anti-money laundering (AML) and KYC norms that require robust mechanisms to prevent frauds, including phishing. Adherence to compliance standards is a major factor driving the adoption of phishing simulators across enterprises.
Increasing digitalization and remote working trends: Rapid digital transformation has dramatically increased the attack surface for organizations. Trends like BYOD, cloud migrations, and remote working have widened exposure to phishing risks. Remote workers are more susceptible to phishing attacks due to lack of security systems as compared to office networks. According to a survey, 35% employees admitted to clicking on phishing emails while working from home. As the remote working trend continues post-pandemic, organizations are deploying phishing simulators to train a wider employee base on phishing identification.
Growing cybersecurity awareness: Growing number and impact of cyber incidents has led to an increase in cybersecurity awareness among businesses and individuals. According to various industry reports like Fortinet Research, around 80% organizations view cybersecurity training for employees as a high priority. There is greater understanding that technology alone cannot tackle phishing and human firewalls play a critical role. By providing phishing simulations and response training, organizations aim to develop a cyber smart culture and resilient workforce against evolving threats. The rising awareness is propelling the phishing simulator market.

Phishing Simulator Market Opportunities:

Integration with new education techniques: The phishing simulator vendors have an opportunity to enhance their offerings by integrating new-age learning methods like gamification, simulations, and microlearning. Instead of just generic simulations, incorporating interactive and customized story-based phishing simulations can make training more engaging and contextual for employees. Gamifying the phishing tests by providing real-time feedback, leaderboard competitions, badges, and rewards can boost employee participation. Such education techniques can help improve phishing detection rates.
Integration with MFA and other security tools: Phishing simulation providers can expand their capabilities by integrating with other security solutions like MFA, identity management, EDR, and SIEM offered by technology partners. This can help organizations take automated actions to isolate compromised users and devices detected via phishing tests. Integrations can also enable seamless data sharing, which can aid in identifying broader attack patterns. Joint solutions combining MFA, phishing prevention and phishing simulation can offer comprehensive protection against phishing. For instance, in October 2023, KnowBe4, home to the largest security awareness training and phishing simulation platform globally, introduced a new free resource known as the multi-factor authentication security assessment (MASA). This tool offers guidance to security experts on devising multi-factor authentication (MFA) strategies, as well as actionable recommendations for protecting against MFA breaches.
Cloud-based delivery models: The phishing simulation market presents ample opportunities for cloud-based delivery models. SaaS-based solutions allow easy scalability to support a wider employee base. Cloud solutions enable organizations to instantly roll out phishing campaigns and training on the go. It also reduces hardware investments and allows easy access from anywhere. Companies with hybrid work models can especially benefit from cloud-based phishing simulators. Vendors can attract SMBs by offering cloud-based phishing simulators with customized options.
Intelligence sharing and benchmarking: Phishing simulator vendors can provide additional value to clients by enabling threat intelligence sharing and benchmarking capabilities. By collectively analyzing simulation data from different organizations, broader phishing patterns, new attacker tactics and best practices can be identified. Customers can benefit by comparing their phishing resilience benchmarks with companies in their industry or location. Collaborative intelligence will enhance the phishing simulation offerings.

Phishing Simulator Market Restraints:

Lack of expertise in managing simulations: While many organizations are seeking phishing simulation solutions, some are deterred by the lack of in-house skills to manage the campaigns and training. It requires expertise to create realistic scenarios mirroring latest attacker tactics, analyze response patterns, and provide contextual training. Lack of proper design and follow-up of phishing simulations dilutes their effectiveness. Organizations are hesitant to adopt phishing simulators due to resource constraints in managing simulations.

Perceived disruption to employee productivity: Frequent phishing simulation campaigns, if not designed properly, can interrupt employees and affect productivity. Too many tests or lack of coordination across departments to avoid simulation overlaps can annoy employees. Lack of awareness on the rationale behind simulations may make some employees perceive it as unnecessary harassment. Organizations are therefore cautious in adopting phishing tools to avoid workforce disruption, which can be a market restraint.

Budgetary constraints for cybersecurity: While organizations are aware of phishing risks, they face budget constraints in allocating resources to new solutions. This is especially true of SMBs that have limited security budgets amidst competing priorities. Many organizations consider technology solutions like email security gateways as sufficient defense against phishing. The perceived high costs of phishing simulators and low awareness among management about their ROI leads to low adoption budgets. This hampers the phishing simulation market growth.