Can Your Business Afford The Cost Of A Data Breach In 2024?
In an era dominated by digital advancements and interconnected systems, the threat of a data breach looms larger than ever over businesses of all sizes. And the cost of a data breach could be more than your company can handle.
IBM reported the average cost of cybercrime globally was US$4.45m in 2023 and 51% are planning to increase security investments in 2024.
Cybersecurity analysts predict worldwide cybercrime could hit US$9.5 trillion in 2024 and the World Economic Forum is bracing themselves for a global cost of $10.5 trillion in 2025.
Experts are not expecting the cost of cybercrime to drop in 2024 or 2025. But why is that?
The official reason is that cybercriminals are continuously evolving and adapting their tactics to overcome security measures. As attackers become more “skilled,” the efforts required to defend against these threats escalate, contributing to the overall cost of cybersecurity.
Advanced Persistent Threats (APTs), ransomware attacks, and other sophisticated techniques have become more prevalent. Well, they have, but so far, the majority of phishing attempts we’ve seen are still blatantly easy to spot.
Would you click this spammy Netflix link?
No, you wouldn’t. It addresses you as “Dear Customer” for starters. That’s a red flag. And the design is not how a Netflix invoice looks.
Having said that, it is true that the cybercrime landscape is continually evolving. In the last year, we have seen cybercriminals become more sophisticated in their methods and as societies become more reliant on technology, there are more traps to fall into i.e. QR codes.
Take a look at our latest piece of content detailing the Latest Hacking Techniques used by Cybercriminals 2023.
Long story short. CEOs can’t really afford to underestimate cybersecurity. If your business network is not protected by adequate IT security measures, a data breach could derail your business.
Why 60% of Small Businesses Fail Following A Data Breach
There is an assertion knocking around the net that a significant percentage of businesses fail following a data breach. It has been quoted that as much as 60% of businesses fail following a data breach.
Whether this data is true or just marketing propaganda, it is evident that the impact of a data breach could have a severe impact on most small businesses. Data breaches often result in immediate and long-term financial losses.
Firstly, there is a high likelihood that you experience operational disruptions, affecting productivity and potentially leading to additional financial losses. The longer the recovery period, the more significant the impact on overall business operations.
There is also a strong chance you will face costs to investigate and rectify the breach. Implementing additional security measures, notifying affected individuals, and reporting the incident to the Information Commissioner’s Office will likely incur some financial deficit.
If your cybersecurity defences are the best they can be within your budget, the ICO may show leniency with the penalty. The standard regulatory penalties are charged at 2% of the total annual worldwide turnover in the preceding financial year, or £8.7 million, whichever is higher.
It’s unlikely that 2% of your annual turnover will put you out of business.
However, under GDPR, companies are obliged to report data breaches to customers. The damage to a business’s reputation is one of the most significant consequences of a data breach.
It is this provision that kills the majority of small businesses.
Customers and partners may lose trust in your ability to protect sensitive information. Customers may take their business elsewhere if they perceive that their data is not secure with a particular company. As trust erodes, customer loyalty diminishes, affecting the business’s customer base and revenue stream.
Rebuilding a tarnished reputation is a challenging and time-consuming process that can impact the business’s long-term viability. If a data breach does lead to the loss of existing customers, it may be difficult to acquire new buyers in time to keep you afloat.
At the same time, you may also have to fork out for legal representation if the ICO decides to take legal action. Non-compliance with these regulations can result in significant fines and legal actions. The legal aftermath of a data breach can further strain the financial resources of a business.
Beyond the immediate cost of a data breach, businesses may incur ongoing expenses for cybersecurity improvements, monitoring, and compliance efforts under the watchful eye of the ICO. These post-breach costs can strain the financial resources over an extended period.
While some businesses may have cybersecurity insurance, the coverage may have limitations or exclusions. Insufficient coverage can leave businesses shouldering a significant financial burden in the aftermath of a data breach.
Read our article titled Does Your Business Need Cyber Insurance? for more information about what cyber insurance policies cover.
IT Security experts in London predict an increase in cyber threats
Our IT security experts in London anticipate that 2024 will bring new challenges and complexities to the forefront. As threat actors evolve their strategies, businesses will need to be extra vigilant of cyber traps.
The proliferation of artificial intelligence (AI) tools is certainly an aid for hackers. As we mentioned above, to date, phishing attempts are amateurish and easy to spot.
However, AI, or FraudGPT as it has been labelled will help non-English speaking hackers to write convincing emails and free AI design tools will help to improve the graphics of spoof phishing attempts which will make it more difficult — although not impossible — to spot malicious emails.
Given the current digital climate, the risk of a data breach in 2024 will demand heightened awareness and robust strategies to protect sensitive information. Can your business afford the cost of a data breach in 2024? Understanding the dangers and implementing effective solutions is paramount.
Businesses that are not adequately prepared for a data breach may struggle to respond effectively when an incident occurs. A lack of a comprehensive incident response plan, cybersecurity measures, and employee training can exacerbate the consequences of the breach.
What are the biggest cybersecurity threats to your business?
The cumulative impact of financial losses, reputation damage, legal consequences, and operational disruptions can lead to a challenging environment for businesses following a data breach.
So what should you look out for to prevent the cost of a data breach
Advanced Persistent Threats (APTs)
APTs involve prolonged and targeted cyber-attacks where attackers gain unauthorised access to a network and remain undetected for an extended period. In 2024, these threats are expected to increase in frequency and complexity.
Ransomware Attacks
Ransomware attacks have become a lucrative business for cybercriminals and continue to be a significant threat. These attacks not only demand financial payments but also result in downtime, data loss, and potential reputational damage.
The success and profitability of ransomware attacks incentivise cybercriminals to continue and even escalate their efforts. There is a strong possibility that ransomware technologies will become increasingly advanced. New techniques will have a higher chance of infiltrating systems using encrypted data.
Insider Threats
Insider threats, whether intentional or unintentional, pose a substantial risk to data security. Employees with access to sensitive information can compromise data integrity, intentionally or accidentally, leading to breaches.
Expanding Digital Environment
The rise of IoT (Internet of Things) devices, the proliferation of cloud services and mass adoption of QR codes among businesses, increases the attack surface for cybercriminals.
With more entry points into networks and systems, organisations face greater challenges in securing their infrastructure, leading to increased costs associated with protection and defence.
Supply Chain Impact
The interconnected nature of global systems means that a cyber incident in one part of the world can have far-reaching consequences. The interdependence of businesses, critical infrastructure, and supply chains means that the cost of cybercrime can extend beyond immediate victims, impacting economies on a larger scale.
A data breach in one organisation can have a ripple effect throughout the supply chain. Partners, vendors, and other stakeholders may be adversely affected, leading to disruptions and additional challenges for the breached business.
Resource Allocation Challenges
Organisations often face challenges in allocating sufficient resources to cybersecurity. Limited budgets, competing priorities, and a shortage of skilled cybersecurity professionals contribute to the difficulty of establishing and maintaining robust cybersecurity measures.
As a result, UK businesses may be more vulnerable to cyber threats, leading to higher potential costs when an incident occurs. The UK government has urged businesses to ensure they have adequate cybersecurity measures in place.
Evolving Regulatory Landscape
Governments and regulatory bodies worldwide are increasingly recognising the importance of data protection and are enacting stricter regulations. Non-compliance with these regulations can result in hefty fines and legal consequences together with a loss of customers.
The primary data protection law in the UK is the “Data Protection Act 2018,” which is the national implementation of the General Data Protection Regulation (GDPR). For more information about the UK’s data protection laws, check out our GDPR Cheat Sheet.
Human Error
Despite technological advancements, human error remains a significant factor in cybersecurity incidents. Phishing attacks, social engineering, and other tactics that exploit human vulnerabilities contribute to the overall risk landscape.
Addressing cybersecurity training should be your number one priority to avoid the devastating effect the cost of data breaches will have on your business.
If your staff is aware of how cyber threats show up, they are more likely to spot them and avoid clicking on malicious links or downloading documents that are infected with malware.
Solutions to Safeguard Your Business
Given the evolving threats and potential consequences of data breaches, businesses must proactively implement robust security measures.
Cybersecurity Training
Educate employees on cybersecurity best practices, emphasising the importance of strong passwords, recognising phishing attempts, and adhering to security protocols. Regular training sessions can significantly reduce the risk of insider threats.
Multi-Factor Authentication (MFA)
Implement MFA across all systems to add an extra layer of security. Even if login credentials are compromised, MFA can prevent unauthorised access, mitigating the impact of a breach.
Regular Security Audits
Conduct routine security audits to identify vulnerabilities in your systems. Regular assessments allow businesses to address potential weaknesses before they are exploited by cybercriminals.
Data Encryption
Encrypt sensitive data both in transit and at rest. Encryption adds an extra layer of protection, ensuring that even if data is intercepted, it remains unreadable without the appropriate decryption keys.
Incident Response Plan
Develop and regularly update an incident response plan. A well-defined plan can minimise the impact of a data breach by enabling swift and effective response actions and reducing downtime and financial losses.
IT Support in London
UK businesses will need to build resilience to cyber threats in 20024. As you navigate the complexities of cybercrime in the digital landscape, it is vital that businesses recognise the urgency of fortifying their defences against data breaches.
The dangers are real, but so are the solutions. Our IT support specialists in London can help you to understand the evolving threat landscape and ensure you implement comprehensive cybersecurity measures that protect your IT network and enable you to avoid the cost of a data breach.
Our IT security solutions are designed to safeguard sensitive information, fortify your reputation and protect your bottom line in an increasingly digital world.
The cost of a data breach is potentially huge — even devastating. The investment to implement a robust cybersecurity strategy, on the other hand, is an imperative cost that most small businesses cannot afford to ignore.
With more than a decade of IT security solutions and consultancy to draw on, we are confident our IT support team in London can help to build your business a reliable cybersecurity fortress with the budget you can afford.
Don’t let the cost of a data breach put you out of business.
