How much are cyber attacks really costing your business?

The digital workspace is a reality – but this new way of working doesn’t come without challenges of its own. The increasing reliance on digital tools has rendered companies more susceptible to cyber attacks, which is cause for concern for businesses in all manner of industries around the world.

The Identity Theft Resource Center’s (ITRC) data breach report shows that the number of data breaches in the US totalled 781 in 2015. These breaches impacted different sectors, from business to healthcare and finance. The ITRC further notes this equates to 97% increase in data breach instances. So, with that in mind, is there a way to quantify the cost that cyber attacks are causing your business?

Cyber attacks are getting stronger

 One of the biggest problems with cybercrime is that the perpetrators are continually developing better cyber attack strategies. Even companies with extensive IT security budgets and large data security teams are struggling to ward off modern cyber attacks - like JP Morgan Chase’s attack in 2014, despite their 1000-strong security team and $250 million security budget.

Insurance against cyber attacks

 A Business Insider report studies the evolution of the cyber insurance market. Some key points identified by the report include:

• Cyber insurance plans can cover many of the costs that result from a cyber attack. This ranges from covering downtime revenue loss, to informing customers of the cyber attack and offering identity theft protection.
• Insurance premiums are continuously increasing. It is estimated that they will double in the next four years, growing to a total cost of $8 billion by 2020.
• There are many traditional insurance companies reluctant to offer cyber coverage because of the frequency of cyber attacks.
• The cyber attack phenomenon is still relatively young, which is why insurers are having a hard time fully understanding risks and exposures.
• Many sectors, such as the manufacturing industry, have a very low cyber insurance adoption rate.

What is the cost of a successful cyber attack to your businesses?

In Australia, cyber attacks are reported to cost enterprises an average of $8.3 million each year. About 53% of that amount goes to detection and data recovery efforts, with the rest being spent on containing any threats discovered and investigating the outcome.

Smaller businesses are not exempt from cyber attacks. Australian SMEs spend an average of $6,600 every time they get attacked. On top of that, many of these smaller companies lack proper insurance against this type of threat. The biggest issue for SMB’s is not necessarily the loss of money, but the downtime.

Protecting your business

 Just because cyber attacks are a part of your digital reality doesn’t mean that your business can’t put systems in place to minimise the risk of a data breach:

• Educate your staff on the proper handling of online data. This ranges from making sure they understand the importance of not trusting unknown sources, (i.e. phishing, malware etc.) to properly training relevant employees on encryption methodologies and company procedures.
• Keep software and hardware up to date. Using obsolete operating systems on antiquated machinery will only make a hacker’s life easier.
• Protect your software, servers, cloud storage and e-mail exchange with adequate security software such as antiviruses and spam filters. Using the right tools will help protect you from most attacks that slip through because of human error or weaknesses in your IT architecture.
• Have backup systems in place to avoid downtime. Many cloud-based server solutions offer backup functionality that ensure access to data in the event of a catastrophe, like a cyber attack.

Investing in good security is always the better alternative to taking a chance and falling prey to cybercrime. Fortunately, there are many specialised security software vendors that offer multiple security solutions and partnerships. Powernet can help minimise the chance of data theft and other cybercrime with our all-encompassing, single point of access security suite.

To find out how secure your business is, take our  free IT health check. For any additional questions, feel free to contact us.