Thursday, July 17, 2014

The Global Cost of Cyberattacks is Rising

Cybercrime continues to be a global concern with an increasing number of incidents reported each year. With more and more breaches happening, and the costs associated with them continuing to rise, it seems no business or enterprise can go untouched. Today, cybercrime is still low risk and high reward, which has contributed to its increasing popularity. We've been aware that crime of this nature has been happening for years, but do we truly know just how much it has and will continue to cost us?

Intel’s McAfee security unit and the Center for Strategic and International Studies released a study in June 2014 that drew on data that is publicly available as well as interviewed experts in an attempt to estimate the financial business losses related to cybercrimes. The report stated that worldwide cyberattack-related losses are estimated at a staggering $400 billion, with $375 billion on the low side and potentially even upwards to $575 billion annually. Findings showed that the majority of incidents go unreported as many businesses choose not to disclose attacks. Researchers also reported that collecting consistent data was difficult because of the fact that countries have not agreed on a clear definition of what is considered cybercrime.

The research examined the direct and indirect costs of a cyberattack including the loss of business information and intellectual property, the cost of securing networks, reputational damage, and the costs of recovering after an attack. The most difficult cost for researchers to estimate for cybercrime is stolen intellectual property, which holds the most value as it could be used to manufacture competing goods. As the use of the Internet for businesses continues to grow, the report states that "the cost of cybercrime will continue to increase as more business functions move online.”

Of the global study, United States companies suffered the highest losses and found that in general, "there are strong correlations between national income levels and losses from cybercrime.”  The United States also had one of the higher confidence rankings of countries tracking cybercrime within their borders. Countries that have weak laws for intellectual property and cybercrime, such as Brazil, were also found to be more targeted with their association of low-risk.

Cybercrime will continue to be an issue as technology, the Internet, and computing grows. At an enterprise it is extremely important to invest in security for your data center now to protect your organization before it ends up really costing you after an attack. "Explaining these variations lies beyond the scope of this report, but one possibility is that cybercriminals decide where to commit their crimes based on an assessment of the value of the target and the ease of entry," the report concluded.

For the complete study, please visit: Net Losses: Estimating the Global Cost of Cybercrime Economic Impact of Cybercrime II.

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