Cybercrime is set to cost the world trillions over the next few years, but this only accounts for a fraction of the true impact on businesses. Immediate financial pay outs are just the tip of the iceberg. There are still many who remain oblivious to the extensive costs of a cyberattack that lurk beneath the surface, including damage to client relationships, plummeting employee retention rates, and worse.
Encore’s latest research explores the various overt and hidden impacts of a cyberattack, helping businesses map out the costs they are – or could be – exposed to.
The immediate financial burden
With the average cost of a data breach sitting at $4.35 million and ransomware attacks costing $4.45 million, it’s no surprise that recovery costs are ranked by 54% of C-suite executives as the biggest financial hit following a breach. These figures would make a sizeable dent in business numbers, with some smaller companies finding the costs financially crippling.
Furthermore, these hefty expenses may not be a one-off. With 80% of ransomware attacks hitting repeat targets, it’s clear that attackers have no issue with ‘kicking a man when he’s down.’ Businesses must therefore act quickly after a breach to avoid receiving a second blow.
The reputational consequences
It’s not just business finances at risk; crucial customer and investor relationships are also on the line. The risks to an organisation’s reputation are not unknown, with 41% of CISOs and C-level executives naming reputational damage as one of the biggest costs to their businesses post breach. After all, losing the trust of existing clients and potential future business has a knock-on effect on your financial success.
No matter the size of the company, experiencing a breach has the potential to damage relationships. It’s not just business assets on the line – an organisation can suffer the long-term consequences of a breach for years. Protecting your reputation and proving to any and all customers and stakeholders that your organisation is best prepared for any attack, is essential.
Attrition rates
As we delve further into the costs of a cyberattack, we begin to uncover the impacts that lurk below the surface.
Our research highlights that cyber breaches have direct consequences for the retention of staff, alongside curbing future drives for employment. It was unveiled that only 33% of office workers would be completely unphased if their business experienced a cyberattack, whilst 54% stated that it would force them to reconsider their place within a company. A lax approach towards cybersecurity therefore poses an additional risk of losing valuable members of the team.
Also, are existing employees actually made aware of such breaches? Our research reveals that more than half of C-level executives have shared details of an attack within the last 12 months alone, but only 39% of office workers believe their organisation had been breached within the same timeframe. If businesses want to keep their employees onside, they cannot afford to keep teams in the dark, and must listen to and address the concerns of those at all levels.
The worst-case scenario
The consequences of a cyberattack can even more severe. Successful breaches now have the potential not only to threaten digital assets but put interstate relations and public infrastructure at risk.
The rise of attacks on healthcare systems in recent years is a prime example, alongside the increasing number of nation-state attacks on influential organisations and critical infrastructure.
These costs are far greater than any singular ransom pay-out. So while these outcomes are less likely, all potential cyber breaches should be treated with the same severity.
Looking beneath the surface
In general, the costs you don’t initially consider could have the most detrimental consequences for the business.
Our research shows that 53% of businesses have cybersecurity at the top of their agenda and 60% plan to increase cybersecurity spending this year. However, this means nothing without strong, sustainable plans in place. Positioning cost visibility at the centre of long-term cyber strategies will allow businesses to broadly assess and manage their costs, whilst mitigating the probability of sudden devastating damages occurring.
When building a resilient cybersecurity strategy for a business, there cannot be any ‘hidden costs.’ Instead, complete visibility must be achieved. In a landscape where it’s a case of ‘when’ not ‘if’ a company will face a cyberattack, this preparedness will build an organisation that is well-secured against both the direct and indirect consequences of a breach.
S‘The True cost of Cyber' can be accessed here, we dive deep under the waters to reveal the costs that are more unknown to CISOs.