How AI based startups use ISO 27001 to increase their value

This article will provide you valuable insights about the impact of AI on information security and why startups developing A technology embrace ISO 27001 certification. Innovative startups are processing a lot of data of all kinds. This creates an anxiety in society as politicians and civil rights activists fear the worst happening. By committing to ethical standards and improving information security, startups can gain the trust of users.

How does information security help startups?

Consumers and governments no longer trust startups to train their AI with data which they are allowed to use for such purpose. That is why legislators are pushing for laws to handle the threats posed by AI and machine learning technology. As the sector has developed generative AI, the pressure is mounting to be compliant.

Hence, AI needs information security to be a fundamental part of its governing processes. Scientists and data analytics experts have to change their work patterns. They have to treat data with more respect and protect it from being mishandled. Therefore, introducing information security management systems (ISMS) into a startup culture not only reduces risk but also improves its footprint on society.

This helps investors and fund managers invest in these forward thinking startups as their sources of capital are comfortable with the startups behaviour. Developing AI based technology is expensive and time consuming. That is why so many AI startups fail to generate cashflow and sufficient growth funding.

Does ISO 27001 have an impact on AI startup valuations?

An AI focused startup which is ISO 27001 certified has a better track record and a greater net value. Let us have a quick look at the core reasons for this higher valuation:

Startups that have been certified according to ISO 27001 have a more organized business and operations structure. Their level of professionalism is higher. At first one might see the introduction of an information security management systems (ISMS) as an undesirable extra burden.

As investors in the venture capital world see a well designed operations as a sign of maturity, they know that the risk of economic implosion is far lower. The cost of funding is therefore lower and the attractivity of the venture is higher. It is easier to pitch capital providers as the governance track record of the startup shows longevity. This longevity is an indicator of quality processes and high value output.

Besprechung der Maßnahmen zur Verbesserung der Informationssicherheit

Is there a specific certification for AI Startups? ISO 27001 vs ISO 27091

There is a standard currently being developed called ISO 27091 which is focused on the cyber security and privacy of artificial intelligence. The core idea is to improve privacy protection by introducing an add-on to the core iso 27001 based ISMS.

Before you start cheering, lets look at how this would be eventually part of an audit and certification process. Currently you can have your company’s management system audited according to ISO 27001. If you wanted to also cover ISO 27018 (cloud provider certification), an audit will first look at the ISMS from an ISO 27001 perspective. If you fulfil all requirements thy can also continue at looking into the compliance requirements of ISO 27018. When you do receive your certificate, it will be a ISO 27001 certificate with an extension on the same document showing that you are also compliant with ISO 27018.

You will see with ISO 27091 that it is also necessary to be 100% compliant with ISO 27001 in order to gain the upgrade to ISO 27091. This may sound easy if you intent using AI to write the governing documentation. Keep in mind, that human auditors will audit your organisation’s way of actively implementing ISO 27091. It is not all about just having some text. Certification bodies will be stricter as the legislative bodies in many jurisdictions demand audits to be conducted by specially trained auditors.

How should an AI empowered startup build its ISMS?

The information security management systems (ISMS) for organizations that develop AI based technology needs to handle not only the development and operations of the technology but also the rapidly changing legal framework around them.

Alignment demonstrates to customers that the organization has a system of controls in place that specifically address the privacy protection of their content. The certificate provides clients an understanding that the organization is in alignment with this internationally recognized standard.  The organization is commitment to the privacy and protection of customers' content.

An ISO 27001 and ISO 27018/27091 certified organization enforces a high bar of data protection and privacy controls outlined in ISO/IEC 27018:2019 for all customer content, regardless of whether or not any particular data is PII.

A accredited certification body may conduct an audit to asses the conformity of the managment system. This assessor is an ISO certifying agent accredited by an Accreditation Council, a member of the International Accreditation Forum (IAF) or other international organization (APAC, IAAC).

Certificates issued by an accredited certification body are recognized as valid certificates in all countries with an IAF/APAC/IAAC member.

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