By 2025, cybercrime is expected to cost the world $10.5 trillion annually. That’s up from $3 trillion in 2015. As attacks become more sophisticated and the world becomes increasingly more digital, the costs of cybercrimes will only rise.
But as a Miami cybersecurity company, we know that the true cost of a cyberattack is multifaceted and far-reaching. These costs can include but are not limited to:
Revenue Loss
Cyberattacks can have short-term and long-term impacts on revenue. When breaches occur, it can disrupt an organization in many ways.
The business may not be able to fulfill orders as quickly – or at all – which will lead to missed sales opportunities and lost revenue.
When ransomware is involved, the revenue loss can be even greater. Industries that have a significant impact on everyday lives are more likely to pay the ransom to reduce downtime.
Revenue losses from cyberattacks can be extensive. In 2022 alone, the global cost of a single data breach hit $4.35 million. That included everything from ransom payments to lost revenue due to downtime, legal fees, audit fees and remediation.
Lost Market Share
Cyberattacks are expensive. Often, these costs are passed on to the consumer or investor, which can make it challenging for a business to hold onto its market share.
Research shows that 60% of organizations that have suffered a data breach have raised their prices.
When significant data breaches occur, companies can underperform on the NASDAQ by 8.6% after just one year, and that underperformance can widen to 11.9% after just two years.
Credit Rating Downgrade
Cyberattacks and risks can result in a credit rating downgrade in some cases, which can impact a company’s ability to secure financing.
In fact, Moody’s announced in 2018 that it would evaluate a business’s cybersecurity practices when assigning credit ratings. One year later, they lowered Equifax’s rating because of the data breach that occurred in 2017.
A credit rating downgrade can make it more challenging to secure financing when you need it most.
Fines and Higher Insurance Premiums
Businesses that suffer cyberattacks can also be hit with regulatory fines and higher insurance premiums.
Data breaches can violate privacy regulations, like the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR) in Europe. Organizations that are found to be negligent in protecting consumer data may have to pay hefty fines as a result.
Along with fines, businesses may find themselves having to pay higher insurance premiums. Following a cyberattack, the insurance company may deem the business a high risk and raise its premiums to reflect that risk.
Higher insurance premiums and regulatory fines can have a significant impact on a company’s financial position.
Tainted Reputation and Strained Relationships
One unfortunate and costly side effect of a cyberattack is a tainted reputation. Cyberattacks can shatter customer trust, and that trust can be difficult to win back. When word spreads of the incident, it can put a stain on your reputation and make it more challenging to get new customers.
Cyberattacks are costly for businesses in every way. Working with a cybersecurity company in Miami can help ensure that your organization is following the best practices for cybersecurity and doing everything it can to proactively prevent an attack.