The financial cost of cyber vulnerability
Data breaches and cyber fraud are a real threat. According to the latest World Economic Forum, data fraud is among the five greatest global threats for 2017. Businesses and governments seem to be aware of the risk, yet, it is hard to put in numbers the real cost of cyber-attacks.
A recent report from Crowe Clark Whitehill revealed that businesses in Britain are losing approximately £125 billion a year due to frauds, cyber frauds being a great part of it. This represents a growth of 43% in fraud since 2008.
source: Crowe Clark Whitehill
The report also claims that, by taken prevention measures, British companies could have saved more than £1,4 million along the 19 years of the research period and could reduce up to 40% of the losses in the annual figure.
The Financial Fraud Action UK (FFA UK) reported last year that there was an increase of 53% in financial fraud in the UK when compared to the previous year. During the second quarter of 2016, the UK was the top attack destination of cyber criminals.
The dangerous aspect of cyber-attacks is their subtle and quiet nature. It might take years until victims realise their data has been breached and in the meantime, criminals make use of it however they want. As an unfortunate result, the aftermath of the frauds and data breaches can be a lot more expensive than these statistics, causing not only financial losses but also damages in reputation and credit in the market. A conspicuous example of this is the bargain which Yahoo’s sell-out negotiations are reaching. Yahoo was once a reference in providing online services, research tools and email accounts.
However, the two major hacks suffered by the company are costing Yahoo approximately $350 million, which will be trimmed off the previously agreed – and already low – $4.8 billion sale price to Verizon. The attacks happened in 2013 and 2014, but it was only last year the criminals who performed the hacking revealed the scale of it. Yahoo suffered the biggest data breach ever recorded, compromising information from more than a billion users. It is hard to imagine a favourable scenario for Yahoo’s finance in the foreseeable future.
Data breach can be a result of various forms of attack, making it difficult for businesses to prevent hacks. Keeping systems up-to-date and complying with the latest regulations and guidelines on internet safety are good means to prevent losses.