Hamilton Place Strategies is a Washington DC bases consulting firm. They published a whitepaper looking at the cost of cybercrime titled Cybercrime Costs More Than You Think. According to their findings, the median cost of cybercrime has increased by nearly 200% in the last five years. One section of the report quotes that “if cybercrime had been a US company in 2014, it would have been the second largest” (in terms of market capitalization). They found that cybercrime costs the global economy about $450 billion per year.
Forbes magazine estimates that cybercrime costs could reach $2 trillion by 2019.
Regardless of how big or how small your business is (and how large or how small your operating budgets are), cybercrime can take a serious toll on the health of your business. From financial losses to tarnished reputations, a major cyberattack on your company can have serious repercussions on the future of your business. Here are some of the costs of cybercrime and why you need to take all necessary precautions to protect your business and assets against a cyberattack.
Cyberattacks cost companies thousands (sometimes millions) of dollars. Immediately following the discovery of a breach, a company has to dish out money to purchase new equipment, implement new security protocols, and wipe and clean workstations and servers company-wide. All steps need to be taken to ensure that the outside attacker is cut off from accessing any more company information. Repairing an IT infrastructure following a cyberattack costs money, takes time, and can severely dampen business productivity which in turn impacts profits.
Companies also have a lot of “damage control” costs to deal with. They need to contract investigators to research the breach, pay for customer compensation (which may or may not include credit and fraud monitoring if their sensitive payment data was compromised), and even for media and publicity support following the aftermath of an attack. If a cybercriminal got a hold of any proprietary information (including intellectual property) and sold it to competitors, it could also mean a major challenge to future profits.
Damage to Reputation
If your customer data gets compromised, you can lose a lot of business. Not only does losing customers equate to a financial loss but it can severely tarnish your reputation putting a damper on getting any new business. When giant retailer Target experienced a data breach at the height of the holiday shopping season in 2013, its year-end sales report suffered. The breach caused many customers to take their business elsewhere. As a result, the company posted profits that were 46% lower in the fourth quarter of 2013 as compared to the previous year. In addition to large costs associated with insurance, investigative costs, data recovery, and customer compensation – future business can be severely impacted thanks to a data breach.
Implementing strong security protocols and making initial investments in security technologies can save thousands of dollars (or more) in the long-run by preventing a cyberattack.