31 March 2021

The true cost of a cyber-attack

The true cost of a cyber-attack

Why do business owners and stakeholders consider cybersecurity risk prevention to be a top priority above other operations?  In recent years a number of high-profile data breaches, including those of Microsoft and Solarwinds, demonstrate that no one is exempt from cyber-attacks. With cybercrime damage costs estimated to hit £ 4.5 trillion annually by 2021, through the introduction of cybersecurity initiatives, companies of all sizes are increasingly taking countermeasures to contain risks.

The true cost of a cyber-attack

The harm of cybercrime will significantly rely on how resilient a business is and what cybersecurity strategy it has put in place.

The estimated cost of a successful cyberattack on an enterprise can be as much as £ 3.69 million, or £ 222 per employee, according to a study carried out by the Ponemon Institute. Yet the loss in pounds only accounts for the direct expense of an infringement. Real costs can decrease even more, and some companies never fully recover from a cyber-attack.

Here are four factors that influence the indirect costs of a breach:

  1. Data loss
    In 2017, approximately 2.6 billion records were hacked, lost or exposed worldwide, according to recently collected data on cybersecurity. The loss of this data runs up much bigger bills than just the initial retrieval of data, contributing to a company’s future fines, penalties and lawsuits.
  2. Investor perception
    A sudden decline in the perceived value of a business is likely to follow after a breach happens. Negative media coverage can fuel the “sell now” groupthink, which could be the final nail in the coffin if your business is unable to stay afloat in the wake of an attack. This is particularly true for smaller businesses that have no infrastructure.
  3. Reputation
    Companies not only lose current customers following a cyber-attack; a weakened brand image means that they often lose the ability to attract new ones at a later date. The brand of a company is related to all facets of business, including growth and sales, which means that a data breach can have significant consequences for your company’s future.
  4. Operational cost
    On top of data-loss, cybercriminals can also focus their efforts on taking down a business’ online operations through DDOS attacks, which can lead to loss of customers, and ultimately money.8 This risk in particular, is one that requires strategic resilience planning to overcome.

Mitigating attacks through cyber risk management

There are many ways an organisation can be deemed to be cyber resilient, but an important indicator is a deep understanding of cyber risk. This means going above and beyond IT considerations, by implementing cyber risk management into your overall business strategy.9

Organisations that have traditionally viewed cybersecurity as separate from other risks are now starting to see the bigger picture.

A business needs to assess the probability and potential effects of a cyber-attack to manage risk and then determine the best way to deal with them. Not all risks can be completely avoided and no company has an unlimited budget or sufficient staff to secure their network completely. Risk management is about managing the effects of uncertainty in a way that makes the most sense, by using resources effectively.

Business leaders and security operations managers need to ensure that they work together to make the best decisions in various areas of business in order to be successful. Keeping track of cyber security is no longer just a feature of IT. With the threat of cyber-attacks increasingly detrimental to business operations, it is the responsibility of all departments to be proactive.

Creating a cybersecurity culture

One of the most vulnerable areas for any organisation is its employees. According to IBM‘s annual X-Force Threat Intelligence Index 2018, human negligence remains the leading cause of data breaches, accounting for two-thirds of all the records compromised in 2017.

All employees are responsible for ensuring the network is kept safe. Even with the latest anti-virus technology, inadvertent human error can still allow malicious software a way in.

Focusing on fostering a strong cybersecurity culture could possibly be a better defence against cyber threats than any single technological policy. A cybersecurity culture intends to make information security considerations an integral part of an employee’s daily life. This is only achieved by weaving cybersecurity through organisational procedures and practices and maintaining active conversations with staff.

To ensure you follow best practice when it comes to your security, your plan should encompass the following:

  • Establish a cybersecurity compliance standard and data-use policy for all employees.
  • Recognise potential threats and the many forms they come in, such as phishing and ransomware.
  • Keep your work secure by using passwords with at least six characters, one of which should be a special character and it should also include at least one capitalised letter. Update these passwords at least every 30 to 60 days.
  • Train employees to detect and report suspicious behaviour.

Key pointers: Strategising for cyber risk mitigation

Consider these procedures when creating your cyber mitigation strategy:

  1. Do hardware assessments
    Ensure that your business only uses ‘clean’ hardware. Do not allow hardware that hasn’t been scanned for a potentially dangerous virus. Ensuring an inventory of key assets, data systems and infrastructure, is essential to track business operations.
  2. Secure wireless networks
    Encrypt wireless networks containing company data. Utilise stronger AES (Advanced Encryption Standard) encryption and a complex passphrase to provide better security from stronger attacks. Filter users’ access to safe and necessary websites.  Block unverified websites and websites that allow illegal downloading and streaming.
  3. Back up data
    All business data should be backed up. In the event of a breach, any lost data should be retrievable. Implement access control, limiting pertinent information on a need-to-know basis, to ensure privacy and protection.
  4. Action software updates
    Cybercriminals are constantly evolving, so you need to prepare to be one step ahead. Make sure your software is as up-to-date as possible, to lessen the chances of a successful cyber-attack.
  5. Review insurance policies
    If all your hard efforts to prevent and stop data breaches still fail, cyber insurance should cover the business’ liability.
  6. Go threat hunting
    Companies should take further steps to prevent attacks by hiring cybersecurity professionals like ethical hackers, penetration testers, and threat investigators to actively hunt for threats rather than only reactively defending their company data.

In order to optimise your cyber risk mitigation strategy, you need to manage cyber breaches before, during and after they happen through a proactive approach. In a world of ever-evolving threats, ensuring your network and your staff have what it takes to stay secure in the face of an impending attack, is fundamental to surviving in today’s cyber landscape.

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