As cyber crime continues to rise we don’t often talk about the monetary costs of a cyber attack. We simply hear things like “point of sale attack” or “database hack,” but how do these attacks actually affect the bottom line of companies involved?
Since the beginning of 2014, a large number of well-recognized companies have fallen victim to cyber crime which include:
- eBay
- Target
- Apple
- Yahoo! Mail
- IRS
- MLB
- AT&T
- UPS
- Neiman Marcus
- Michaels
- Home Depot (retail).
- P. Morgan Chase
- Dairy Queen International
- P.F. Chang’s China Bistro
Each year the Ponemon Institute, a conductor of independent research on privacy, data protection and information security policy, releases a report on cyber attacks. This year’s report polled more than 250 companies, over 2,000 company personnel, in seven different countries, researching over 1,700 attacks that took place during 2014.
What they found:
- In the U.S., the average cost per cyber attack was $12.7 million in 2014, up from $11.56 million in 2013.
- In Germany companies reported the average losses of $8.13 million, up from $7.6 million in 2013.
- In Japan the average was $6.9 million in 2014, compared to $6.7 in 2013
- The UK companies averaged $5.93 million compared to $5.19 million
- Australian companies reported an average loss of $3.9 million in 2014 compared to $3.7 million in 2013.
Based on the findings, the United States companies had the highest and costliest incidence of cyber attacks. Regardless of location however, cyber attacks are increasing and are costing more each year. Overall, there was a 10.4% net increase in attack costs from fiscal year 2013 to 2014. This figure is nothing to scoff at.
Sure, an attack puts the greatest strain on the affected average consumer whose data is stolen, but the attack on companies lead to massive repercussions. A prolonged and significant loss of business or revenue can spell doom for some of our favorite brands. “Reputation and the loss of customer loyalty does the most damage…in the aftermath…companies find they must spend heavily to regain their brand image and acquire new customers…certain industries, such as pharmaceutical companies, financial services and healthcare, experience a high customer turnover.”[1]
Cyber security is not something that anyone should take lightly. This insecurity affects consumers and companies alike.
[1] “Ponemon Institute Releases 2014 Cost of Data Breach: Global Analysis.” Ponemon.org. Ponemon Institute LLC, 14 May 2014.