Loss of valuable data can cost a company millions. Cyber attacks continue to increase and are impacting companies worldwide. Defensible brands are few, and they are generally attractive to large and established companies with a wide online following. About 6% of businesses have claimed the need to pay ransoms to regain access to their underpinning IT system.
Not only are financial losses a result, but cyber attacks can also put operations and business operations on hold. It is essential to ascertain the actual consequences of hacking on your business so that you are in a position to take protective measures. Here are some ways hackers can ruin your business.
1. Reputational damage
Whilst it is difficult to quantify, businesses that experience a cyber attack increasingly realize that they come to be perceived as having a damaged brand image very substantially. Consumers and suppliers could hesitate to reveal their personal information to a hacked firm. The retail giant Target witnessed its reputation evaporate into thin air after a 2013 data breach involving the credit card information of some 40 million customers; the security failure attracted massive costs to settle.
JPMorgan Chase Co (JPM) also struggled with a similar issue in 2014 when hackers compromised the banking data of its customers. Cybercriminals managed to access sensitive details like customer phone numbers, email addresses of 76 million accounts, and small business information.
Beyond reducing institutional trust, studies show that hacked publicly traded companies will likely see a short-term market value drop. Security researchers at Comparitech discovered that the share prices of breached companies on the New York Stock Exchange dropped by 3.5% after a breach.
2. Revenue losses
Loss of money can be a result of hackers on your business. On the other hand, it is also clear that the revenue decrease is an inevitable consequence because, by design, customers with a high level of awareness will find ways not to fall prey to cybercrime.
The company, too, can incur a loss to extort potential victims, as the business can serve as a source of extortion. Ransomware attacks can render systems useless for good and can cost a company millions if it is foolish enough to pay.
In a cybercrime of this nature, the consequence for a victim enterprise network could be restricted access or some degree of control over parts of that enterprise network. These may be exploited for any attack to extract information or lock systems to extort them, i.e., to demand a ransom. Cybercriminals threaten to release or sell the personal information of an attacked company if the attacked company does not comply with their requests.
3. Data Destruction
A single active malware can carry out a flood of attacks, wiping out data and rendering critical systems unreactive. Data destruction occurs when attackers delete or corrupt important business documents. It can be difficult for a company to obtain customer data, which may cause them to need help to fulfill contracts.
It can also make an organization liable for damages. Hackers can also damage the hardware of the business and the computers on that hardware, rendering it unusable. Remediation for such damage can be challenging and even infeasible in some cases. There is no reason to ‘roll the dice’ with the likelihood of attack and the attendant risks of data loss it can put at your company. Protecting your assets with the highest IT security and backup systems can protect your irreplaceable data.
4. Increase costs
Organizations must spend more on cybersecurity to protect themselves from hackers. Businesses may continue to incur additional costs in the form of very high insurance premiums. Ransomware attacks that prevent individuals from accessing IT systems can trigger a heavy financial impact. Six of the companies paid a ransom in 2019, totaling $382 million lost, according to Hiscox.
Hiring lawyers and other specialists, such as cybersecurity experts, may also become necessary to comply with the law. However, it can become incredibly expensive to pay increased attorney fees plus civil damages for cases against your business.
Credit bureau industry heavyweights such as Equifax had to pay the price the hard way after a data breach in 2019 exposed the personal information of several millions of customers. Subsequent litigation forced the company to pay over $400 million to affected individuals.
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5. Operational disruption
Aside from direct financial damage, companies can suffer significant indirect costs, such as heavy operational disruptions that cause revenue loss. Cybercriminals may employ a variety of tactics to disrupt a company’s usual activities.
Specifically, performing well across many tasks may not be possible if the tasks target virus-infected computer systems, erase valid data or virus-infected computer systems, and deliver malware on web servers so that the computer you own is rendered unreachable.
Hacktivists’ ultimate goal is disrupting business processes, and these well-known computer freedom fighters can be equally ruthless in striking the IT infrastructure of state agencies and large corporations as a means of protest. For example, in 2010, pro-Wikileaks hackers briefly brought credit card processors Mastercard and Visa offline with a website attack.
6. Potential business closure
In the worst-case scenario, attackers can affect a company not only at the monetary level but also to the extent that it has to shut down completely. Therefore, entrepreneurs must rethink the way that they collect and store sensitive data.
Most organizations no longer actively hold customer information about money and personnel, including social security numbers or dates of birth. A number of e-commerce providers have, in fact, closed down their sites because they are unable to effectively prevent cyber-attacks.
Today, consumers expect an enterprise to demonstrate that it manages these problems and continues supporting a company that takes security seriously.
7. Intellectual property theft
Designs, technologies, and validated marketing approaches are all assets of a business. Ocean Tomo estimates that intangible assets (e.g., intellectual property) constituted 87% of S&P 500 companies in 2015.
Many commercial entities use the cloud as a storage medium for intellectual property. However, the service is not entirely passive against attacks. Roughly 30% of U.S. businesses reported to have been corporate targets of simulated intellectual property theft by rivals.
Anyone accessing the Internet with a computer is at risk of cyber attacks. However, cybercriminals frequently leverage phishing, spam, and malicious websites to deliver malicious programs into machines and gain access to data security.
Hackers can even try to cryptographically recover personal information if the systems are not secured by firewalls. They are also able to keep track of conversations and overload the back end of your website. Predators can achieve this by impersonating another entity to persuade your firm to share sensitive information, such as intellectual property or financial information.
Safeguarding your company’s intangible assets from cyber-attacks is critical to be one step ahead of the competition.
8. Legal consequences
Cyber breaches can have legal consequences. Data protection and privacy laws demand companies to maintain the security of all personal data they gather, regardless of whether it belongs to staff or clients. It remains a serious risk that you will face severe fines or sanctions if it is found to be the result of inadequate security measures.
For this reason, learning how to sublimate risk is highly nontrivial. A cyber security expert can perform such checks on your ICT infrastructure to identify defects. Having an action plan to help prepare for an attack and limit its aftereffects is a nice step that can enable you to report any incident to the proper authorities, clean up any affected system, and get your business up and running again. The continuous routine should include investments in user training, education, and cybersecurity awareness inside your organization.
9. Loss of competitive advantage
Data theft has many adverse consequences for companies. Conversely, the loss of competitive advantage is also an outcome of hacking. The inability to recover business data from thieves has the potential to tarnish brand image, leading to loss of reputation and reduced sales. It may also harm the victim’s privacy, although the victim’s stolen data, including sensitive personal information, is in the breach.
In addition, passwords and usernames can be used by hackers to open other computers. Changing passwords and usernames is wise to prevent crooks. Never disclose logging-in information when you are not sure about or suspicious of the individual or site who is enquiring about this information.
Additionally, do not hesitate to contact IT personnel if your account has been compromised. An IT team or third party is activated to prevent the harmful effects of the attack. Hackers may use flaws in either of your hardware or software to benchmark systems without permission.
One way to mitigate these risks is to upgrade your software and be aware of security patches released by software vendors. A firewall is a sufficient tool to restrict cyber attackers’ access to local machines over the Internet. Also, install antivirus software to identify and prevent automatic attack programs.
10. Identity theft
Identity theft can occur when a third party, such as your social security or credit card, is used to commit fraud without your consent. Cyber criminal purchases are possible if the robbers obtain the clients’ credit card details. Although the scale of attacks can differ, commercial interests should never ignore the fundamentals of reducing the risk posed to businesses by digital offenders.
Stay vigilant and train your team on the leading practices for preventing identity theft to make it difficult for hackers to steal sensitive information discreetly or damage critical systems. Additionally, it would be beneficial if you made an effort to purchase a robust cybersecurity application to reduce the impact of a subsequent hack.
Businesses are at risk of attacks from cybercriminals, whatever the scale, no matter their size or their skills. In addition to being capable of causing extreme financial damage, the other problem is the likely reputational damage, as well as significant legal penalties. Hence, it is wise to be aware of different types of attacks and how to protect your business.
Conclusion
Cybersecurity risk is always present for companies of any size, and the consequences of unpreparedness can be devastating. Reputational, financial, operational, and legal damage are all too serious to be ignored. Companies have to adopt a prophylactic strategy to safeguard their own enterprises, their employees, and their consumers.
Mitigata offers financial support in the event of a breach, advanced risk management tools, expert advice, and strong recovery help. Thanks to Mitigata by your side, you can reliably solve the mysteries and problems of cyber security and keep your business’s defenses strong when the unexpected arrives.
Smart Cyber Insurance no longer allows the threat of cybercriminals to win, protecting your brand and your financial cells.
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