Cyber breaches are alarmingly expensive, costing impacted organizations an average of $4.45 million, according to IBM. Depending on the type and scope of the cyber incident, expenses can range from lost revenues, operational downtime, and reputational damage to ransom payments, remediation costs, and legal fees. Below is a closer look at some of the major consequences of a cyber breach, and how to fortify your system against a potential attack.
Operational Downtime and Lost Productivity
A cyberattack is often heavily disruptive to a company’s operations, leading to costly downtime and loss of productivity. In the immediate aftermath, firms may lose access to their network and files, which may stretch for hours, days, or even weeks. Firms will need to take immediate action to contain the data breach, conduct a thorough investigation into how it occurred and which systems were impacted, and fortify their systems to prevent future breaches. Depending on the size and scope of the attack, the recovery process can stretch for an indeterminate amount of time, causing costly system outages, reducing revenues, and diverting company resources from other important tasks.
Loss or Exposure of Sensitive Data
Cyberattacks often result in the exposure or destruction of sensitive, valuable data. This may include your firm’s own sensitive data as well as that of your clients. Many businesses have electronic records of customer names, social security numbers, and other personally identifiable information (PII) that could be used to uncover individuals’ identities. Threat actors steal PII to commit identity theft themselves or to sell it on the black market. Confidentiality and privacy of client communications are particularly critical in certain industries, such as legal, financial, and healthcare, making firms in those industries particularly lucrative targets for cyberattacks. Exposure of sensitive data can have disastrous consequences for your clients and in turn your business, which may be hit with class action lawsuits from clients as well as regulatory fines, penalties, and punitive consequences if you failed to comply with your industry’s cybersecurity standards.
A cyber breach can erode the trust that clients, partners, and other stakeholders have in your firm, which can have long-lasting detrimental effects on both your brand and your bottom line. Impacted customers may take their business elsewhere or share their displeasure through social media or other means, harming your firm’s revenue and reputation and impairing your ability to attract new customers now and in the future. Since an immediate response can help mitigate the fallout, firms often bear the costs of hiring a public relations consultant with expertise in crisis communications who can navigate external communications and help restore confidence in the firm. To further win back the confidence of its clients, a breached firm may also decide to pay for credit monitoring services for those impacted, incurring that additional cost over the span of at least a year.
Higher Cybersecurity Insurance Premiums
Another potential consequence of a cyber attack is that it will most likely impact your company’s insurability. With the explosive growth in ransomware and other cyberattacks, premiums for stand-alone cyber insurance soared by 62% in 2022, according to Fitch Ratings. The high risks have spurred some insurance companies to exit the market, with others decreasing the number of cyber policies they write. Policyholders who suffer a breach will see their cyber insurance premiums go up, and they may even be dropped by their insurance carrier.
Protect Your Data
Given the severe consequences of a cyberattack, protection is paramount. Businesses must take a systemic, multi-faceted approach to their cybersecurity. This includes configuring all devices that staff use for work with anti-virus software, firewalls, encryption tools, and security patches. Hardware and software must be updated regularly to take advantage of state-of-the-art security features available from manufacturers. Businesses must also monitor their systems on a 24x7x365 basis to identify and thwart potential threats and have a plan in place to immediately contain and respond to an attack. In this day and age, every firm should have a strong password policy in place that uses multi-factor authentication (MFA), in addition to providing ongoing training to educate staff about common and emerging cyber threats.
The dynamic and resource-intensive nature of cybersecurity makes it cost-prohibitive for many small and midsize firms to effectively handle their security in-house. Managed service providers have the resources and expertise to provide the multi-pronged elements of cybersecurity more efficiently and effectively than many small and midsize businesses can do on their own.
Tabush Group is a leading provider of Managed IT Services and offers a Desktop as a Service (DaaS) cloud solution. To learn more about how our state-of-the-art IT solutions can make your firm’s operations more efficient and secure, contact us.