The Long-Term Consequences of Cyberattacks
The financial impact of a cyberattack can have a ripple effect on your organization. Keep breaches at bay with effective cybersecurity strategies.
Articles published October 16, 2017 by Steve Simpson
When news breaks of another major cyberattack, it usually focuses on how much customer data was stolen or how much initial money was lost. However, there are other long-term negative effects that often don’t make headlines.
These effects develop more fully after the buzz has died down, but can have a more long-lasting impact than the initial revenue loss.
Here are some of the longer-term consequences that cyberattacks and breaches have on targeted organizations.
The Financial Impact of a Cyberattack
While there is an initial loss of money right when the cyberattack happens (especially if it’s ransomware) there’s also a lasting revenue impact, which results from lost opportunities and customers. While some of the more long-term effects can be difficult to calculate, Microsoft reports:
- 29 percent of organizations that suffered from a breach lost revenue, and 38 percent of those organizations lost more than 20 percent.
- 23 percent of organizations lost business opportunities, and 42 percent of those organizations lost more than 20 percent of new business.
- 22 percent of organizations lost customers, and 40 percent of those organizations lost more than 20 percent of current customers.
According to Deloitte, the immediate cost of a cyberattack is only 10 percent of the total incident-related revenue loss to the organization over a five-year period. That means that the bulk of long-term costs of a cyberattack come from unexpected and less visible areas, such as business disruption, loss of property, and a devalued reputation.
Deloitte highlights 14 areas of impact following a cyberattack. Some areas are the direct costs commonly associated with an attack that make up that initial 10 percent, and others are the less tangible but still impactful areas responsible for the other 90 percent of revenue loss.
- Technical investigation
- Customer breach notification
- Post-breach customer protection
- Regulatory compliance
- Public relations
- Attorney fees and litigation
- Cybersecurity improvements
- Insurance premium increases
- Increased cost to raise debt
- Impact of operational disruption or destruction
- Lost value of customer relationships
- Value of lost contract revenue
- Devaluation of trade name
- Loss of intellectual property
The financial impact of one of these areas alone can be substantial, but combined, they are no joke. So, how do you prevent these things from happening to your organization?
To avoid the negative outcomes outlined above, it’s essential to have the right security in place. Long-term cybersecurity solutions and strategies that will keep your organization protected include multiple layers of security.
Technology services such as anti-virus, firewall protection, network monitoring, and wireless security each provide a layer of defense to give you state-of-the-art protection. Combined, an elaborate network architecture protected behind a firewall can make all the difference in keeping your organization safe from being hacked.
Unified Threat Management (UTM) is an effective and reliable approach to security that many organizations use for comprehensive risk and exposure protection. UTM includes a variety of technology services and tools (such as those listed above) to keep your networks and servers secure.
A second layer of an effective cybersecurity strategy is knowledgeable, aware employees. Creating a company culture that emphasizes data security and awareness can help prevent a lot of breaches from happening in the first place. Employees who are trained on cyber and social engineering tactics will better know how to recognize and avoid such attacks.
Another component of that company culture is a strong, effective data security policy. A data security policy should include information about the use of mobile devices, social networking, internet usage, email policies, and what methods will be used to stop the use of unsupported or unsafe services and applications. When you clearly outline and regularly communicate the approved methods for securely transferring or sharing data, employees are aware of what is safe and can do their part to keep the organization secure.
To ensure maximum protection, it’s best practice to encrypt your data while in transit and at rest. Encryption renders information unreadable when accessed without proper authorization. It is imperative to have a process in place that ensures sensitive devices are encrypted and files and emails are being properly sent.
An Effective Cybersecurity Strategy
Although data and money are usually the two things that cybercriminals target, the consequences and long-term ramifications are even more reason to work to prevent cyberattacks. That’s why it's so important to ensure you have the right security in place.
In addition to educating employees on strategies and policies, many organizations leverage third-party experts for managed security services because it provides more time for internal resources to focus on core business functions and initiatives. With a managed services provider proactively monitoring your network and patching your applications, your organization can realize efficiency and productivity gains among internal staff.
What cybersecurity strategies does your organization have in place?
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