Cybersecurity is an investment that pays off. It protects the company from ransomware and other attacks that wreak havoc on business productivity. Investors can find cybersecurity companies by searching for them on financial websites and investing research platforms that cover the sector. They can also invest in exchange-traded funds that include a portfolio of cybersecurity stocks.
The Cost of Cybercrime
The cost of cybercrime is staggering. One report says that cyberattacks caused $3 trillion in damage in 2015, $6 trillion in 2021 and could reach $10.5 trillion annually by 2025. This represents the biggest transfer of wealth in history and is larger than the damages inflicted by natural disasters in any given year.
The most obvious and immediate cost of a cyberattack is a loss of revenue. Companies can lose millions of dollars in sales, whether from a ransomware attack like the one that Colonial Pipeline paid or other attacks such as data breaches or denial-of-service (DoS) attacks. This loss can lead to financial instability and even bankruptcy.
For smaller businesses, these losses can be especially devastating. They may not have the resources to withstand the loss of profits from a cyberattack and the subsequent need to pay third parties such as law, public relations and negotiating firms. These costs can be passed on to customers and investors, reducing the company’s profitability.
As internet use continues to expand, cybersecurity must remain a top priority for businesses of all sizes. While the best defense is a strong offense, the threat landscape constantly changes and requires an ongoing investment in the right tools and talent to remain ahead of the curve.
The Cost of Data Breach
The costs associated with data breaches include not only payments for ransom and the price of forensics but also lost business. Research shows that a damaged reputation will result in customers abandoning your products or services, which leads to revenue loss. One study found that 38% of companies experience a loss of more than 20% of their regular revenues following a breach.
The good news is that you can avoid this fate by investing in security. But figuring out how much to spend can be tricky. One way to do this is to use a decision theory model that helps you determine the right level of spending for your particular organization.
This approach looks at your potential risk and capabilities to create a target profile of the roles that must be protected. Once you identify these roles, you can make targeted investments to fill the gaps and build the resilience to keep your organization safe.
In a recent study, McKinsey found that organizations spend more on cybersecurity solutions than they need to. This proves a high rating of statistics on how many businesses invest in cybersecurity. Finding the right balance between threat protection and operational efficiency is critical. That means aligning cybersecurity needs with the organization’s growth aspirations and prioritizing areas where risk is highest. This will enable you to maximize your resources and prevent costly gaps from forming.
The Cost of Identity Theft
Cyberattacks are a growing concern for consumers, regulators and organizations. The damage from cyber risk incidents can have operational, financial, reputational and strategic consequences for businesses of all sizes. This reality makes investing in cybersecurity essential for successful companies.
Sadly, identity theft cases are on the rise. The good news is that overall losses are declining, but the fact remains that millions of Americans fall prey to identity fraud each year. This impacts well beyond the dollars and cents, as victims often suffer nonfinancial ramifications, including sleep problems and severe mental health issues.
A recent Identity Theft Resource Center report found that credit card fraud accounted for 35.4% of all ID theft cases in 2021. This type of fraud can also significantly impact businesses, with the most devastating issue being seeing the entire database of cards compromised.
The soaring demand for cybersecurity solutions can provide opportunities for innovative solution providers. The key is to develop bundled offerings that include hot-button use cases while focusing on outcomes rather than technology. This is a way to ensure that customers feel valued and receive value for their investment. This approach can help security service providers to build digital trust and, ultimately, increase revenue over time.
The Cost of Fraud
The world we live in today relies on technology for everything from communication (email, smartphones, tablets), entertainment and socializing to shopping and travel. Almost every business requires computers and internet connectivity for their success. Cybersecurity is the practice of protecting these networks, devices and systems from unauthorized access or unlawful use. It can take many forms, including network security, which covers a wired or wireless computer network from intrusion; information security which helps to ensure the confidentiality and integrity of data; and cyber risk management, a set of policies that reduces the potential impact of a successful cyberattack.
Fraud is a growing problem for companies as hackers become more organized, connected and sophisticated. This year, fraud losses were estimated to be $5.127 trillion worldwide—up from $4.27 trillion in 2009.
These losses are due to higher Y/Y incidence rates of total and successful fraud attempts, increased and accelerating fraud multipliers, and more advanced, globally coordinated fraudsters who use easily accessible, personally identifiable information from the dark web.
To avoid these costly damages, businesses need best-practice security solutions to verify customers’ physical and digital identities across touchpoints. These solutions must be able to assess the true risk of the persona and communicate their findings efficiently and seamlessly to the customer. These types of solutions can help to mitigate the effects of fraud, reduce chargebacks and recover more revenue for merchants.