Everyone can agree that the risk of cyber security breaches is on the rise, but what’s the average cost to a UK business of such an attack?
Answer: £1.2m. And that’s before hidden costs such as reputational and brand damage are taken into account, plus an average anticipated drop in revenues of 13 per cent as consumers and other firms take their business elsewhere.
This is according to research by global information security and risk management company NTT Com Security, which found that the UK's expected costs are higher than for any other country in the survey.
Taken globally, across enterprises of all sizes, the average cost of a cyber breach is expected to be just short of $1m. However, the anticipated financial burden is heavier for larger companies. Businesses with fewer than 1,000 employees are on average liable to lose $362,550 compared with $1.47m for companies with more than 5,000 staff.
In terms of remediation costs following a security breach, 18 per cent of a UK company’s costs would be spent on legal fees, 18 per cent on fines or compliance costs, 17 per cent on compensation to customers, and 11 per cent for third-party remediation resources. Other anticipated costs include PR and communications (14 per cent) and compensation paid to suppliers (12 per cent) and to employees (11 per cent).
Stuart Reed, a senior director at NTT Com Security, said in a statement: “Attitudes to the real impact of security breaches have really started to shift, and this is no surprise given the year we have just had. We’ve seen several major brands reeling from the effects of serious data breaches, and struggling to manage the potential damage, not only to their customers’ data, but also to their reputation.”
NTT surveyed 1,000 business decision makers in the US, UK, Germany, France, Sweden, Norway and Switzerland. Its findings show that while 48 per cent of UK businesses say that information security is vital to their organisation and just half agree it is good practice, a fifth admit that poor information security is the single greatest risk to the business, ahead of decreasing profits (12 per cent), competitors taking market share (11 per cent) and on a par with lack of employee skills (21 per cent).
Access the full report here.