Businesses Underestimating the True Cost of Cyber Attacks
According to a government report, organisations are yet to recognise the full financial consequences and damage to their business following a cyber attack.
The Cyber Security Breaches Survey 2019 found that the mean annual cost of a cyber attack leading to a negative outcome for medium businesses was £9,270 and £22,700 for larger organisations. The reported figures included the cost of implementing additional security measures; lost, damaged or stolen data or assets, and the resulting loss of customer revenue.
Kingsley Hayes, Managing Director at data breach and cyber security specialist Hayes Connor Solicitors, said: “The findings show the significant cost and disruption to a business following a cyber security breach however, the survey demonstrates that wider costs, which may take some time to fully realise, are yet to be included when businesses are calculating their preventable losses.
“The reputational damage that an organisation faces following a cyber attack can be difficult to quantify but will certainly hit the bottom line with the potential loss of business from existing customers who may question their trust in the organisation, the financial impact of negative word of mouth, and the associated cost of trying to regain trust in a brand.
“Consumers are increasingly aware of their rights and will pursue compensation for their losses. A data breach claim can still be pursued against an organisation even before any financial losses are experienced by a victim and can include the psychological distress inflicted on individuals whose personal data has been compromised.”
The survey found that nearly a third (32%) of businesses who reported a negative outcome following a cyber attack needed to put new measures in place to prevent further attacks. More than a quarter (27%) had allocated more staff time to deal with a breach and nearly one fifth (19%) suffered the disruption of staff being unable to carry out their daily duties as they focused on managing the resulting damage.
Kingsley Hayes continued: “More businesses are adding cyber security to their agendas at senior level, however, the true financial risk is yet to be fully realised. Hayes Connor is currently representing hundreds of claimants against organisations including Ticketmaster, British Airways, Equifax and Amazon.
“Regardless of the size of an organisation or the sector within which it operates, cyber security risks are real – and can make a substantial dent. Consumers arguably have more choice than ever before and alongside pursuing financial compensation following a breach, they can choose to take their custom elsewhere – and tell all their friends and family about it. The full cost to a business following a data breach may take several years to realise and can realistically run into tens of thousands of pounds.”
For more information on Hayes Connor Solicitors, visit the website at www.hayesconnor.co.uk.