Cyberattacks are costing businesses dearly. If measured as a country, cybercrime is projected to inflict damage that exceeds the wealth of entire nations by 2023. In the boardroom, cybersecurity is now considered a business risk. However, accountability still falls mainly on the shoulders of IT leaders. Defending Your Business reveals the sobering costs of failing to prioritize cybersecurity defenses.
The Cost of a Data Breach
Cybercrime is a global issue that threatens every company. However, many businesses must invest to safeguard their consumer and corporate data. In a time when the average cost of a data breach is over $9 million, the need for cybersecurity solutions is becoming increasingly apparent. However, statistics on how many businesses invest in cybersecurity show that only about two in five small businesses have security protection. A data breach costs a business a lot of money. It is not just the direct costs, like fines and lawsuits, but also the indirect costs, such as lost revenue and damage to brand reputation. These costs can add up quickly, especially for businesses regulated by government agencies that must pay fines for non-compliance. Data breaches are a massive problem for small businesses as well. A single breach can cost them tens of millions of dollars because they lack the financial resources and institutional support that larger companies do. Six months after a breach, 60% of small businesses shut down. The cost of a data breach increases as the time it takes to contain it increases. That is why it is essential to invest in cybersecurity early on and to implement secure work practices such as DevSecOps.
The Cost of Fraud
Fraud is a common and serious problem, costing businesses billions of dollars annually. This doesn’t just include the money stolen in unauthorized transfers or fraudulent loans – it also includes indirect costs such as time banking staff spends rectifying issues and the damage to their reputation and brand. The average fraud loss for a business is $125,000. While this isn’t a tremendous amount of money for more giant corporations, small businesses are often unprepared to recover from such a significant loss. Combined with the 14 months that, on average, goes by before fraudulent activity is detected, these losses can be catastrophic for small businesses and lead to bankruptcy. This is why it’s so important to invest in cybersecurity defenses. By deploying advanced layered security, companies can prevent the most common forms of fraud before it occurs, saving them millions of dollars in revenue and preserving their reputation. This is a clear ROI and why every business must prioritize investing in their cyber protection.
The Cost of a Cyberattack
Over 60% of all businesses that experience a data breach close their doors within six months (National Cyber Security Alliance). To help prevent attacks, companies can invest in cybersecurity infrastructure such as zero trust and lateral movement security technology, train employees on phishing tactics regularly, and ensure they use reputable third-party vendors. The cost of a data breach can be even higher if the attack remains undetected for extended periods. For example, a study found that breaches that lasted more than 200 days cost an average of $4.35 million compared to $3.61 million for those within less than 200 days. The best way to reduce data breach costs is to ensure your organization has a well-designed incident response plan and consider taking out cyber insurance.
The Cost of a Ransomware Attack
A ransomware attack carries a heavy financial burden on the affected organization. In addition to the cost of paying a demanded ransom, a company must also pay for downtime and lost hours, device and network costs, cyber forensics, compensation, and other incident response expenses. These costs can quickly rise into the millions of dollars for larger organizations. Furthermore, if the victim is in a sensitive industry like healthcare or finance, it can have an even more significant impact on customer and user trust. These repercussions can cause long-term damage that isn’t easy to recover from.
Additionally, many victims are forced to spend money on legal defenses to combat expensive fines from regulators and hefty settlements with customers and users. This doesn’t even include the cost of repeat attacks, higher insurance premiums, and reputational damage. The best way to minimize the risk of a costly incident is to prioritize cybersecurity protections. Taking these steps won’t eradicate remediation costs, but it will reduce them and help your company to recover faster and in the most economical manner possible.
The Cost of Downtime
A business can face many monetary losses when it suffers from cyberattacks. But there’s also the human element that can hurt just as much if not more, than financial loss: The online sports betting site whose customers switch their wagers to another platform (and never return). The family is forced to postpone a vacation because of a canceled flight. The small artisan is counting on Black Friday sales to push their business into the black. The cost of downtime is complex and varies by industry, business size, and the actual duration of a cyberattack. However, one study found that organizations in banking and finance, professional services, government, manufacturing, insurance, technology, and telecommunications can expect to lose $5 million per hour of downtime. To help mitigate these astronomical losses, companies should invest in robust cybersecurity defenses. These include multi-factor authentication, regular security audits, employee training on best practices like zero trust and micro-segmentation, and advanced threat detection and response tools. The investment pays dividends in the form of a more resilient and secure enterprise better equipped to weather the storm when it hits.
