What is the business cost of a data security breach?
Although the large majority of research into the cost of cybersecurity breaches and the effects of cyber attacks on businesses was conducted before the impact of the 2020 pandemic began to hit, there were already worrying trends afoot at that point. And what the business community has seen since then has further bolstered the arguments for ramping up business security.
In this article, we review the effects of cyber attacks on business operations, investigate the cost of data breaches, and highlight the importance of protecting against becoming a cyber crime target.
Effects of cyber attacks on business
The most common types of cyber attack are phishing (where staff receive fraudulent emails or are directed to fraudulent websites), impersonation, viruses and other malware. The latest Government Cyber Security Breaches Survey of UK businesses issued in early 2020 shows that cyber attacks have evolved and become more frequent and almost half of businesses (46%) report having experienced a cyber security breach in the previous 12 months. The effects can be particularly damaging.
- Temporary loss of access to files or networks was a tricky issue to deal with before the pandemic hit when many finance teams were working in offices; once the mass move to home working occurred, this problem became even harder to resolve from a practical perspective.
- Damaged software or systems. Again, this is an issue which was much easier to fix when PCs and networks were mostly based within an office environment and IT could access these quickly to either fix or replace as required. Breaches amongst a disparate and remote workforce present IT with a completely different set of problems.
- Financial loss is the third most commonly reported effect of a cyber attack. Gone are the days when the Finance Director was the only person with access to the company bank account. Now finance teams are larger and more complex and the widespread use of apps and online banking mean that there’s inevitably more vulnerability.
Protecting against these risks requires a robust cyber security strategy that is rigorously applied and continually reviewed and updated. Assuming your firm is immune is a weakness; complacency is perhaps the largest threat of them all.
One of the consistent lessons learned is the importance of staff vigilance as the vast majority of breaches and attacks are still likely to come via them. Ensuring your staff are aware of the risks and understand what to look for is a vital first line of defence.
Productivity and data software that helps you keep track of who has logged into what system and what actions have been taken can also be an effective approach.
And moving systems and infrastructure to the cloud is proving an effective way for many businesses to enhance their defences and ensure remote working is conducted safely.
The average annual cost for businesses who lose data or assets after a breach is £22,770*
Whilst that might seem like a drop in the ocean for a multinational, for many SMEs, it could be the difference between being able to continue trading or having to shut down. Bear in mind too that depending on the specific circumstances of the breach and the actions that happen afterwards, damage can be done to the company brand and reputation that could indirectly cost a lot more in lost revenue.
Consider too how much your business could do with £22,700…
*Source: Cyber Security Breaches Survey, Government Department for Digital, Culture, Media & Sport
Why staying safe is so vital for your business and finances
Staying safe online is important for every sector and, thankfully, most organisations are working hard to become more resilient against breaches and attacks, and better able to make a fast recovery if a problem does occur. But cyber criminals are evolving too and the fact remains that breaches that result in negative outcomes can incur substantial costs and severely dent finances.
