May 18, 2023
Estimated reading time: 4 minutes
What is the true impact of cyberattacks?
Cyberattacks have become an increasingly common occurrence in today’s world. These attacks can have disastrous consequences for businesses, individuals, and even entire countries.
The true impact of cyberattacks can be difficult to measure, but that it can incur significant costs is clear. In this blog post, CUBE explores the true impact of cyberattacks and how they can be devastating for organisations and individuals alike. In 2022, the finance and insurance industry had 566 data breaches, which amounted to over 254 million leaked records.
What is a cyberattack?
A cyberattack is any attempt to disrupt, damage, or gain unauthorised access to computer systems, networks, or devices. These attacks can come in many different forms, including malware, ransomware, phishing, and DDoS (Distributed Denial of Service) attacks.
The impact of cyberattacks on a firm
One of the most immediate impacts of a cyberattack is the disruption of business operations. When a business’s computer systems are compromised, they may be unable to access critical data or perform essential tasks. This can lead to lost productivity, missed deadlines, and lost revenue.
In some cases, businesses may even be forced to shut down temporarily or permanently as a result of a cyberattack. A good example is the Heritage Company, which within two months had to suspend operations and fire 300 people just before Christmas. These are common in ransomware scenarios where a malicious actor can lock all systems in a network and demand payment. Beyond the immediate impact on business operations, cyberattacks can also have long-term consequences.
One major impact is the loss of trust. When a business is hacked, customers and partners will lose faith in the organization’s ability to protect their data. Loss of reputation can lead to a loss of customers, partnerships, and even damage to the company’s reputation.
Another impact of cyberattacks is the theft of sensitive information. Hackers can gain access to personal information, such as credit card numbers, social security numbers, and other personally identifiable information. This can lead to identity theft and other forms of financial fraud.
In addition to the above impacts on businesses and individuals, cyberattacks can also have significant impacts on national security. Governments and military organisations are prime targets for cyberattacks, as they often hold sensitive information related to national security. Cyberattacks can be used to steal classified information, disrupt critical infrastructure, and even launch cyber warfare.
The cost of cyberattacks
The cost of a cyberattack can be difficult to quantify, as it can vary widely depending on the size of the business, the severity of the attack, and the type of data that was compromised. However, there are some common costs associated with cyberattacks.
One major cost of a cyberattack is the cost of recovery. Businesses may need to hire IT professionals to help restore their systems and may need to purchase new hardware and software to prevent future attacks. The cost of lost productivity and revenue can also add up quickly.
Another cost of a cyberattack is legal and regulatory compliance. Depending on the industry and the type of data that was compromised, businesses may be subject to fines and penalties for failing to comply with data protection regulations. For example, Equifax was fined $700 million for the data breach, affecting 147 million customers.
In addition to these direct costs, there are also indirect costs associated with cyberattacks. Businesses that are forced to focus on recovery from a cyberattack may miss out on opportunities to grow and expand their operations. This can have long-term impacts on the business’s bottom line.
How can firms protect themselves from cyberattacks?
Here are a few tips to reduce the risk of a cyberattack:
- Have company-wide password policies. Use strong passwords and change them regularly. Enable multi-factor authentication whenever possible.
- Keep software and systems up to date with the latest security patches. Most software patches are security updates.
- Use firewalls and other security measures to prevent unauthorized access to computer systems and networks.
- Be vigilant about phishing and other social engineering attacks. Train employees on cybersecurity best practices, such as how to identify and report potential social engineering attacks.
- Use encryption to protect sensitive data, such as credit card numbers and personal information.
- Back up important data regularly and store it securely offsite.
- Implement a cybersecurity incident response plan that includes incident response procedures and regular security assessments.
- Use regulatory intelligence to ensure your firm is up to date with current cyber regulations and has technology in place that can identify gaps in compliance.
By taking these steps, businesses and individuals can reduce their risk of a cyberattack and mitigate the potential impact of any attacks happening in the first place.
Cyberattacks have a significant impact on businesses, individuals, and even national security. The cost of a cyberattack can be significant, including direct costs such as recovery and compliance, and indirect costs such as lost trust and reputation. With the rise of AI-powered attacks that happen at scale, if an organisation hasn’t been hacked, it is just a matter of time. By taking steps to protect against cyberattacks, businesses and individuals can reduce their risk and mitigate the potential impact of any attacks that do occur.
Discover how CUBE can help your firm comply with cybersecurity regulations.