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Can the True Cost of Cyber Crime be Calculated?

11th, June 2019

According to the Oxford English dictionary cyber warfare is “the use of computer technology to disrupt the activities of a state or organisation, especially the deliberate attacking of information systems for strategic or military use”.

Our reliance on technology makes the threat of a cyberattack worrying likely, regardless of the size, location or nature of your business you could become a victim.

Few areas of our existence in this life remain untouched by the infiltration of the digital revolution. Internet World Stats states that there are now over 4.3 billion internet users worldwide seeing a growth of 1114% since 2000. The Radicati Group suggest that the total number of business and consumer emails sent and received each day will exceed 293 billion in 2019. Cisco’s Whitepaper goes on to predict that the annual global IP traffic will reach 3.3 zettabytes by 2021.

Figures by the Department for Digital, Culture, Media and Sports (DCMS) in April said that the typical number of breaches suffered by an organisation targeted in a cyber-attack had risen from four in 2018 to six in 2019. Each successful attack today is causing more damage on average and is harder to fix as a result.

Types of cybercrime businesses face;

• Identity Theft
• Online Scams
• Fiscal Fraud
• Theft from Businesses
• Extortion
• Customer Data Loss
• Industrial Espionage
• IP Theft
• Money Laundering

Cyber security is becoming more of a priority for businesses seeing those that view cyber security as a high priority up by 75% in 2019, compared to 53% in 2018. Government initiatives such as the Ten Steps to Cyber Security and the Cyber Essentials schemes are enabling organisations to access better resources to protect their organisations against potential attacks.

Research by insurer Hiscox, found that 55% of firms faced a cyber-attack in 2019 up from 40% last year. Average losses from breaches also soared from £176,000 to £283,598, an increase of 61%.

A Detica report in partnership with the Office of Cyber Security and Assurance in the Cabinet Office estimates that the cost of cyber-crime to the UK to be £27 billion per year. A significant proportion of this cost comes from the theft of IP from UK businesses which is estimated at £9.2 billion per year.

Businesses bearing the brunt of cybercrime are providers of software and computer services, financial services, the pharmaceutical and biotech industry, and electronic and electrical equipment suppliers.

Due to challenges associated with robustly calculating costs, cybercrime is difficult to accurately quantify even though many organisations have attempted to calculate a figure. According to a report by the Home Office ‘Understanding the costs of cybercrime’ published in January 2018 we need to break down the associated costs into three categories;

• Costs in anticipation
• Costs as a consequence; and
• Costs in response.

Costs in Anticipation

These costs include your computer security protection software, training on cybersecurity for your employees and the implementation of these practices throughout the organisation. It may also include the costs associated with switching internet service providers and vetting staff or contractors to increase security. Having cyber insurance in place is advisable but consequently come with a price tag.

Costs as a Consequence

Should you fall victim of a cybercrime then the costs will start to escalate with no infinite amount. Not only will you bear the cost of fixing any equipment or infrastructure that has been affected, but there is also the loss of business caused by the disruption, potential online fraud resulting in customer refunds and the irreputable damage to your company’ reputation or brand.

Costs in Response

All cybercrimes need to be reported which may potentially lead to prosecuting costs, certainly if you failed to obtain adequate insurance as well as ongoing legal, PR and improved IT bills.

The cost of a cyberattack is limitless and with companies still having unprotected data and poor cybersecurity practices in place they are left exposed to data loss and huge bills. In 2017 the infection of the Wannacry virus infected more than 400,000 machines in at least 150 countries at a total cost of around $4 million (Malware Tech Blog).

There is no doubt that the risk of cybercrime is real, with Symantec stating that there are around 24,000 malicious mobile apps blocked every day and the average cost in time of a malware attack is 50 days (Accenture). If you don’t think it will happen to you, maybe think again with Microsoft Office formats such as Word, PowerPoint and Excel making up the most prevalent group of malicious file extensions at 38% of the total (Cisco).

Workspace Technology Limited are compliant with the Government initiative Cyber Essentials Scheme ensuring that all our data and that of our clients’ is protected.

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