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The Financial Implications of a Cyber Security Attack

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Financial Implications of a Cyber Security Attack

As the world increasingly relies on technology, it has become evident in recent years how important cyber security is for individuals, organizations, and businesses. Not only does it protect them against data theft and cybercrimes, but it can also be crucial for the success of said organizations. Therefore, it should be a key objective for companies to implement cyber security across all departments of their business.

Firstly, cyber security attacks can affect businesses and organizations in many ways. The economic cost of cyber-attacks can be colossal as they often result in a substantial financial loss arising from the theft of corporate information, theft of financial information (e.g., bank details or payment card details), theft of money, disruption to trading (e.g., inability to carry out transactions online) and loss of business or contract. On top of this, companies often have to spend large amounts of money fixing systems that have been impacted and networks and devices. Businesses also have to dedicate a large chunk of time to reassuring those whose information has been stolen and possibly even employing extra people to deal with customer concerns while trying to recover from what has happened.

As experts expect global cybercrime costs to grow by 15 percent per year over the next five years, it is important to utilize different methods to potentially reduce threats. Imposing business VPNs like the Perimeter 81 ZTNA solution is a great way to guarantee employees’ online security, so they are protected even over unsecured networks. In the case of ransom attacks, ransomware needs to be implemented, which can stop employees from going into IT systems unless the company pays off the hacker. The issue with implementing this is that it can also be quite financially straining and could put the company under further stress. However, enforcing solutions is ultimately vital in keeping cyber criminals at bay and could be a small cost to pay in comparison to the expenses cyber-attacks could incur.

Furthermore, besides the economic costs associated with trying to stop cyber-attacks and recover from them, companies also have to spend large amounts of money on cybersecurity technology and expertise, notifying affected parties of a breach, insurance premiums, and public relations support. In addition, after a company has been the victim of an attack, it may need to use funds to hire lawyers to support them and ensure that they carry out the proper procedures. On top of this, they may need to consider spending even more money to acquire the services of an attorney, often associated with costly fees.

When a company has been affected by cybercrime and cyber-attacks, there is also a significant amount of reputational damage that can be detrimental to the business in the short and the long term. Once a company has fallen victim to attacks like these, information like this usually circulates to potential customers and can dissuade them from trusting that organization. They are unlikely to feel safe entrusting their sensitive data to a company that has previously been hacked. This damage to a company’s reputation can result in colossal long-term financial harm and even lead to its liquidation. Suppose those at the head of a company are determined to regain a good reputation. In that case, vast amounts of money must

be put into new marketing campaigns to rebrand a business as trustworthy. It is also essential for companies dealing with recovering from cyber-attacks to best customers about what has occurred instead of covering it up, as this could provoke further distrust.

Moreover, if a series of cyber-attacks have affected a business, it is unlikely that the business in question will continue to operate as usual. Usually, organizations will need to enter a period of operational downtime where the company is simultaneously trying to recover while experiencing a lull in customs. These attacks could cause disruptions in all categories of a business and can result in lost revenue. An aspect of operational downtime that is often overlooked is employee productivity. After a cyberattack that leaves a company unable to operate for a while, employees are typically torn away from their everyday activities. Often this can result in a diminished sense of importance within their role for a particular company and even result in them handing in their resignation. Companies will struggle to cope with the aftermath of a cyber-attack with fewer employees and then have to spend more money conducting interviews and onboarding new employees to fill the roles of those who have left.

In conclusion, in the world of today, cybercrime and cyber-attacks are still rife, affecting millions of businesses worldwide. These cyber-attacks are detrimental to an organization’s reputation, and the financial implications can be colossal. In this regard, it is wise that businesses take steps to protect themselves against potential cyber-attacks to thwart any costs incurred. Although many ways to prevent cyber attacks, they often still occur. In these instances, companies should practice honesty, which is essential to retaining customer loyalty.

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