While cyberattacks are on the rise, many businesses have yet to take a truly proactive approach to cybersecurity. With the low costs of spearheading an attack and the potential profits at stake, cybercrime is unlikely to slow down anytime soon. Securing your website can protect you from devastating costs.
The cost of deploying a cyberattack can be as low as $34 per day. If you’re a business on the receiving end of that attack, your costs, on the other hand, can be substantial. It only takes one successful cyberattack to take a website completely offline, and this downtime can cost a business up to $427 a minute. Even more alarming, the damages caused by cyberattacks are likely to cost companies $6 trillion by 2021, according to Cybersecurity Ventures.
There’s no doubt that cybercrime can damage an organization’s bottom line. Here’s what you need to know about the various direct and indirect costs associated with a cyberattack, and how you can reduce your business’s risk of falling victim to cybercrime.
The Direct Costs of Cybercrime
The term “direct costs” refers to the money spent by businesses in response to an incident such as a data breach. It’s estimated that roughly 34 percent of expenses related to a cyberattack are direct costs, according to the 2016 Ponemon Cost of Data Breach study.
Here are some of the most common direct costs associated with cybercrime:
Direct Cash Loss and Lawsuits
When thinking about the cost of a cyberattack, what likely comes to mind first are the actual funds stolen and lawsuits. These costs can vary widely depending on factors like the scale of a breach, the size of the company and the industry. For example, UK-based law firm insurance company QBE found that a staggering $120 million dollars was stolen from legal firms over an 18-month period due to cyberattacks.
When a major security breach takes place, many businesses hire cybersecurity experts to determine the size and impact of the breach. The cost of hiring an expert commonly ranges from $10,000 to $100,000 per month, and can be even higher for small businesses that have fewer internal resources than larger companies.
Notifying Affected Parties
Companies that experience cyberattacks are required to notify the affected customers that a breach took place and that they may be impacted by it.
While notifying customers may not seem expensive on the surface, the notification process can be one of the most expensive direct costs of an attack for businesses, ringing up at $200,000 on average, according to Valorie O’Shoney of the insurance provider Beazley Group. Some of the expenses associated with this process include developing contact databases, hiring outside experts, and determining regulatory requirements.
While the direct costs of a cyberattack can be damaging enough, the indirect costs can be even more significant to a business’s bottom line.
The Indirect Costs of Cybercrime
The indirect costs of a cyberattack are those expenses that don’t involve a direct dollar amount after the incident, such as loss of reputation, loss of customers and website downtime. While the impact may not be immediate, it’s estimated that indirect costs make up 66 percent of the total cost of a cybersecurity incident over time.
Some of the indirect costs of cybercrime include:
Loss of Reputation
The importance of maintaining a positive business reputation is simple – you can attract more customers, stand out from your competitors and improve customer loyalty. If your business experiences a security breach, it can negatively impact your company’s reputation, damaging your image and deterring future customers.
In addition, a security breach can compromise your company’s brand equity, intellectual property and goodwill, three assets that greatly contribute to your company’s value. In this way, the breach can also damage your company’s value.
Loss of Customers
In addition to harming a company’s reputation, a security breach can also cause you to lose current customers. In fact, research shows that two-thirds of customers who’ve had their information stolen from a website will stop doing business with the organization running the site – and this churn can be significant. For instance, the 2016 Ponemon Cost of Data Breach Study discovered that legal organizations experience a 5.1 percent churn rate following a data breach.
In terms of website downtime, the indirect costs involved can vary widely depending on the business. For instance, Amazon stands to lose $220,000 per every minute of downtime their site experiences. While not every business stands to lose quite as much as this retail giant, the cost of downtime is severe – no matter your business size. To determine this cost, an impacted business can calculate how much revenue their website generates every day, and then multiply that number by the number of days their site is down.
The direct and indirect costs of a security breach are far-reaching for businesses, making cybersecurity more important than ever. To help reduce the financial impacts and risk of a cyberattack, organizations can take these steps to protect their business and customers.
Reduce Cyberattack Costs by Securing Your Website and Systems
To reduce the impact of cyberattacks, businesses can start by taking a proactive approach to cybersecurity by understanding their tech stack and ensuring their cybersecurity strategy includes all components. This includes identifying and implementing the proper cybersecurity solutions for their networks, operating systems, core services and website.
There are cybersecurity solutions for all levels of the tech stack. However, when it comes to the web application layer, website security solutions will play a key role. These solutions include a web application firewall (WAF), automated malware scanning and remediation tools, a virtual private network (VPN), website backup solutions and more. The specific security needs of your business will help determine which cybersecurity solutions should be prioritized.
Additionally, educating employees on security best practices is another important aspect of maintaining a secure business. Security awareness training keeps cybersecurity top of mind for employees, decreasing their chances of falling victim to ransomware and phishing attacks that lead to data theft, shutdowns and other cyber threats that will cost your business.
Take Action Against Costly Cyberattacks
There’s no doubt that both the direct and indirect costs of cyberattacks can be devastating for businesses, resulting in a loss of revenue, customers and reputation. However, by being proactive about implementing solutions to secure your website, you can protect your business and your bottom line against costly cyberattacks.
To learn more about how cybersecurity can help protect your business against costly cyberattacks, contact us today at 1-866-743-4336.