Whether it’s stolen data, lost income, or reputational damage, cyber breaches can be debilitating for any business.
Reluctance to invest in robust security defences can bring organisations to their knees, leaving cyber attack victims wishing they’d done more to protect their valued data, systems, and assets when they had the chance.
According to official government data, exactly half (50%) of all UK businesses experienced some form of cyber breach in the last 12 months, rising to 74% for large businesses. Here, cybersecurity experts ramsac lift the lid on the true cost of a cyber breach in today’s digital landscape, what this means for your business, and how to mitigate the risks.
Expensive data loss
If you run a business, your data is a prime target for cybercriminals. In the event of a cyber breach, UK businesses may face hefty fines from the Information Commissioner’s Office of up to £17.5 million for failing to take reasonable steps to safeguard their customer and employee data. This includes the theft or destruction of everything from corporate data, intellectual property, and personally identifiable information (PII) such as names, credit card details, payroll numbers, and medical history. Tuckers Solicitors found out the hard way when they were hit with a £98,000 penalty after a cyber breach led to sensitive client data being leaked to the dark web.
What should you do?
Cyber breaches happen at any time, day or night. Proactive cybersecurity monitoring protects your data and sensitive information around-the-clock by detecting and isolating a cyber attack the moment it occurs, preventing further damage to your business.
Massive operational disruption
Whether it’s a ransomware attack or a phishing scam, a cyber breach can paralyse a business for days, weeks and even longer. A breach can cause prolonged downtime of company systems and networks so that a business can no longer serve customers and maintain revenue streams, resulting in huge financial losses.
Official UK government figures found that phishing is by far the most common type of data breach, accounting for 84% of businesses and 83% of charities that experienced a cyber attack. By using scam emails, text messages, phone calls, and other communication platforms that appear to come from legitimate sources, cybercriminals trick employees and victims into handing over sensitive data or visiting fake websites. This is followed by impersonation attempts via email or online, impacting 35% of businesses and 37% of charities, while viruses and other malware rank third, affecting 17% of businesses and 14% of charities.
What’s the Answer?
Phishing attacks can be hugely costly for businesses. For instance, it may involve the breach of a finance employee’s email account, enabling cybercriminals to intercept lucrative invoices worth several thousands of pounds or more. To limit the risk of your businesses becoming a phishing victim, it’s important to provide employees with phishing awareness and cybersecurity training, giving them the skills to spot an attack and take mitigating action. An organisation’s human firewall is one of the most powerful tools in a company’s cybersecurity defences.
Significant data and system recovery costs
Recovery from a data breach or any form of cyber attack can be lengthy and hugely expensive, depending on what’s been stolen, damaged, or destroyed. Organisations can experience prolonged downtime of networks and systems, losing them money and rendering them incapable of maintaining their normal service levels. Estimates suggest the British Library spent around £7 million of its reserves and took many months to recover from a ransomware attack that brought down the website and blocked customer orders.
Depending on your organisation, a complete IT outage could cause widespread damage and disruption to operations and cost vast amounts in lost revenue. The recovery process could be long and expensive and may even put smaller companies out of business.
What’s the best approach?
Any cyber breach that encrypts critical business data can cause severe interruption to daily operations. Businesses with cloud-based services often benefit from segregated backups that may limit damage and speed up their recovery. But organisations with complex IT estates or unsuitable backup processes could find themselves out of action for weeks. A solid disaster recovery plan and backup strategy can make all the difference when a cyber attack happens. Not only that but investing in a recovery plan before a cyber breach happens makes financial sense, as post-breach recovery solutions can be more costly than early preventative measures.
Lasting damage to company reputation
It is tricky to quantify the damage a cyber breach causes to a company’s reputation. It can erode customer trust, expose vulnerabilities and lax attitudes in data protection, and create a perception of negligence around digital safeguarding. Not only that, but it could also generate negative media headlines, destroy a company’s image, impact stock prices, and make it tougher to attract new customers or investment.
As a business, regaining your reputation after a cyber breach can be a long and difficult process. IT service provider Kaseya suffered a ransomware attack that affected more than 1,000 other organisations using their software. In addition to any liability costs and compensation it had to pay, the top-ranking Google results for “Kaseya” included references to the cyber breach which could only have harmed their reputation as a trustworthy software provider.
What’s the way forward?
No organisation can sweep a cyber attack under the carpet. Businesses are required by law to report any cyber breach involving customer data to the Information Commissioner’s Office within 72 hours. Additionally, they should contact all customers that were impacted without delay.
Protecting data and systems from the outset is the most effective way to avoid reputational damage in the long run. Whether it’s implementing strong password protocols, multi-factor authentication, data encryption, regular software updates or an effective recovery plan, there are numerous ways a company can protect itself against a cyber breach.
It is always vital to consider the impact of a cyber breach and the true cost in terms of lost revenue, incident recovery and the lasting effects of reputation damage. As a business owner, adequate investment in the latest cybersecurity solutions could end up being the best investment you’ll ever make.
