To give you the best experience, this site uses cookies. By continuing to use our site, you agree to our use of cookies. To learn more, please read our privacy policy.
Protect Your Business from the Increasing Cost of Cybercrime
May 2nd, 2016

Protect Your Business from the Increasing Cost of Cybercrime

Bill Gaskill

With the widespread use of the Internet, the cost of cybercrime has become an increasing problem for businesses. Cyber-attacks have a significant financial impact in the modern world. Attacks on corpo...

With the widespread use of the Internet, the cost of cybercrime has become an increasing problem for businesses. Cyber-attacks have a significant financial impact in the modern world. Attacks on corporate networks and the theft of intellectual property cost an estimated $400 billion annually for businesses. Most experts believe cyber-attacks and the cost they have will only increase.

The actual costs of cybercrime may be much higher than estimated by the report. Businesses may actually underreport the losses due to cybercrime. They have no incentive to report the theft of intellectual property. A serious cyber-attack would only harm the reputation of businesses if made public. Factoring in the fact that cyber-attacks are likely underreported, the actual cost of cybercrime could be as much as $575 billion annually.

Impact on the economy

Cybercrime could also affect unemployment rates throughout the world. A report from the Center for Strategic and International Studies, sponsored by the Intel-owned McAfee, estimates the loss of as many of 200,000 American jobs and 150,000 European jobs from cybercrime. Not only does cybercrime harm businesses, but it also has an adverse impact on the global economy as a whole.

There have been a loss of as many of 200,000 American jobs and 150,000 European jobs from cybercrime.

The Internet economy is also affected negatively by cybercrime. The Internet offers many targets to attack. Consumers use the Internet worldwide, and businesses are increasing use of the Internet for everyday activities. As Internet usage rises, the opportunity to commit cybercrime only grows larger. The CSIS estimates that cybercrime reduces economic growth by 20 percent every year.

Causes

The increasing cost of cybercrime could be the result of many factors. One of the biggest factors is the fact that cybercrime is inexpensive for criminals. Cybercrime is a growing industry. It is relatively low-risk, and the returns are high. Cyber criminals exploit widespread vulnerabilities in software and configuration to access secure systems. They also employ social engineering in order to exploit individuals. Because of the low cost, cybercrime is very profitable for criminals.

Who is vulnerable?

Both individuals and corporations are vulnerable to cyber-attacks. According to the report from the CSIS, around 800 million online records are accessed illegally every year. At least 3,000 companies in the United States reported that they had been hacked last year and two banks in the Middle East lost about $45 million because of cybercrime. A British firm reported a loss of $1.3 billion due to cyber attacks. Though both individuals and corporations are at risk, the cost is much higher for companies. And the bigger gains from attacking corporations provide an incentive for cybercriminals to focus on companies.

Around 800 million online records are accessed illegally every year.

Companies often do not offer adequate protection for critical information. Businesses often employ broad security strategies to protect sensitive data. This results in inadequate protection of data and easily exploitable security systems. When companies actually invest in better information security, the business still cannot respond to incidences of cybercrime effectively.

Why companies are vulnerable

Companies frequently underestimate the loss and risk associated with cybercrime. Grave breaches in security often act as a reality check for companies. The compromised data must be recovered which is typically very costly. Additionally, there is damage done to the company’s brand and public image. Current and prospective customers may turn away from companies after a serious security breach.

Increased attempts to address cybercrime

There is an increased sense of urgency in regards to addressing cybercrime. Increased reports of cybercrime from businesses have created a panic. It seems as if cybercrime is uncontrollable and growing exponentially. Many enterprises realize that the issue needs to be addressed.

The increasing costs of cybercrime have led to employing more extensive security measures. This also has an adverse impact on the global economy. Businesses invest less in research and development and invest more in network security. After an acute attack, companies realize that investing in cyber security is worth the cost. The need to address cybercrime impacts every aspect of an enterprise.

Efforts to address cybercrime

A significant issue involving cybercrime concerns law enforcement. Most state, local and even federal agencies are not adequately equipped to address it. They do not have sufficient resources to investigate security incidents or apprehend the suspects in cybercrimes. This only adds incentive to committing cybercrime. The risk of being caught and prosecuted is relatively low.

The losses due to cybercrime are only projected to increase. If developed nations address the security issues, cybercrime will still continue to grow in undeveloped countries.

Cybercrime in the U.S.

The United States is falling behind may other countries in regards to preventing cybercrime. The U.S. has been slow to address the issue and allocate an appropriate amount of resources to defend against cyber attacks.

Other nations around the world are not faring much better. Developing countries are particularly vulnerable as they normally do not have the budgets nor the expertise to adequately fight this sort of criminal act.

Role of government

Many experts believe that governments should stay out of the fight against cybercrime. It is their opinion that governments are unable to keep up with the constantly evolving cybercrime landscape. Frequent changes in technology make it hard for governments to maintain robust defenses against cybercrime. Experts concede that the government may have good intentions, but their efforts fall woefully short.

Experts believe that governments should leave cyber security to the private sector instead of trying to address it themselves. The private sector is more efficient. Private sector experts maintain currency with new technologies and can swiftly respond to the changing risk environments.

Governments have massive bureaucracies. The rules and standards states set may be outdated before they can be implemented. Most government agencies are no match for the savvy tech of today.

The Takeaway

Cybercrime is one of the biggest threats to the economy today. It impacts individuals and companies around the world, and economic growth is stunted by cybercrime.

The high gain, low-risk nature of cybercrime makes it an attractive option for criminals.

Companies around the world are beginning to realize that they must increase their security and address the cybercrime problem. Many believe the government cannot adequately address cybercrime and that private sector is better equipped to address the growing problem. If the problem is not dealt with effectively and soon, the cost and negative economic impact of cybercrime will only grow.


Related Articles

The Business Phone Buying Guide