Unless the organization pays the hackers, ransomware may restrict employees from accessing any IT systems. This imposes a significant financial burden. According to Hiscox, 6% of organizations paid a ransom in 2019, resulting in a loss of $381 million. In order to comply with cybersecurity requirements, businesses must also retain attorneys and other professionals. If they are the victim, they may have to pay more for attorney costs and damages as a result of civil proceedings filed against the corporation.
Equifax, one of the main three credit bureaus, experienced a data breach in 2017 that exposed the personal information of 147 million clients. As a result of the ensuing action, the corporation agreed to pay up to $425 million to assist impacted individuals.
Disruption in Operations:
Companies also incur indirect costs from cyberattacks, such as the likelihood of a substantial stoppage in operations, which can result in revenue loss. Cybercriminals may disrupt a company’s usual operations in a variety of ways, including infecting computer systems with malware that deletes sensitive data or installing malicious code that prevents access to your website. This all leads to significant operational disturbance.
Changes in Business Practices:
Cybercrime has an impact on businesses in ways other than financial. Companies must change the way they keep and gather data to guarantee that sensitive information is not compromised. Many businesses have ceased retaining financial and personal information about their consumers, such as credit card numbers and birth dates. Many businesses have shut down their internet storefronts for fear of being unable to defend themselves against cyberattacks. People are increasingly conscious of their digital data and are interested in how firms deal with security concerns, and they are more willing to favour organizations that are open and outspoken about the safeguards they have put in place.
Companies who are victims of massive hacks may have their reputation severely harmed. Customers and suppliers should avoid entrusting critical information to a firm whose IT infrastructure has been compromised at least once previously. If a publicly listed company is impacted by cybercrime, its market value drops in the near term. According to research, share values of targeted businesses plummeted an average of 3.5% after each assault, with the Nasdaq losing 3.5%.
Intellectual Property Theft:
Product designs, technology, and go-to-market strategies are among the most important assets of a corporation. According to intellectual property adviser Ocean Tomo, intangible assets accounted for 87% of the value of S&P 500 firms in 2015. These intellectual properties are kept on the cloud, making them extremely susceptible. According to studies, cyber hackers have stolen the intellectual property of 30% of US corporations in the last ten years.