Cyber crime is now a one trillion dollar drag on the global economy, it is claimed. That’s just more than one percent of global GDP, which is up more than 50 per cent from a 2018 study that put global losses at close to $600 billion, according to a cyber product company’s study. Theft of intellectual property and monetary assets is damaging, but some of the most overlooked costs of cybercrime come from IT down-time, and the damage to company performance, says McAfee.
Why such a rise? According to the report, it’s ‘explained by better reporting and that, unfortunately, cybercriminals are using more effective techniques. More countries and organisations are reporting cyber crimes.’ Ransomware and phishing-related schemes have increased dramatically, the report says. The biggest non-monetary loss was in productivity, and lost work hours.
The report pointed to the need for hiring outside IT consultants, legal and PR help after a cyber-attack. “One of the biggest challenges is the lack of an organisation-wide understanding of cyber risk. This makes companies and agencies vulnerable to sophisticated social engineering tactics, and, once a hack has succeeded, they fail to recognise the problem in time to stop the spread of malware. The increased (and unavoidable) use of personal devices, such as smartphones or tablets, expands the attack surface and complicates the management of cybersecurity.”
The study estimates that intellectual property (IP) theft and financial crime account for two thirds of monetary losses and pose the greatest threat to businesses. “Cybercrime is increasing because it pays, it can be easy, and the risk to cybercriminals can be low.”
The report quotes the example of cosmetics company Avon; an IT security incident rendered access to the company systems unusable for almost a month, as disclosed to the United States Securities and Exchange Commission.
Cyber risk insurance is becoming normal for big businesses that can reasonably expect to face a cyber attack, but it may be harder to justify for smaller businesses and municipalities that may choose to self-insure, the report says.
Last month, the company said that consumers have shifted direction due to 2020 global events, opening their risk to online threats as they live, work, play, and buy all through their devices.
Comment
Adam Philpott, EMEA President, McAfee said: “Our report findings show just how important it is for businesses to shore up their defences against cyberattacks. The costs aren’t just the result of monetary losses, but also include significant reductions in both productivity and lost work hours. When businesses fail to maintain and evolve their cyber defences, it is now the difference between their ability to thrive or just survive within the market.
“To keep cyber attackers at bay, especially as their tactics evolve to become even more sophisticated, businesses must go beyond establishing baseline protocols to create and maintain a secure environment. This includes the use of risk intelligence to prioritise threats, predict which malware campaigns will be launched against them, and pre-emptively improve their defensive counter-measures. This will allow organisations to get ahead of adversaries and better manage their cyber risk.
“Moving forwards, it’s vital that business leaders consider cyber as an investment, rather than a cost. When done well, implementing the right security does far more than protect against the losses outlined in this report. It becomes an incredible driver of business growth, innovation and resiliency.”
About the survey
McAfee commissioned the technology market researchers Vanson Bourne. Between April and June, the research firm interviewed 1,500 IT and line of business decision makers. Respondents came from the US (300), Canada (200), the UK (200), France (200), Germany (200), Australia (200) and Japan (200).
