As the world moves more toward digital transactions online, the threat of cyberattacks becomes an everyday reality for businesses. Malevolent hackers are constantly creating more lethal malware to launch cyberattacks for fraudulent gain against organizations with costly consequences. It would appear that organizations and cybersecurity experts cannot keep pace with these nefarious characters, and frequently now, a company has to pay ransom for the recovery of their data.
While for the big multinationals, it will be just a few million dollars lost, to smaller businesses, it could spell doom. However, in whatever way one looks at this scourge, cyberattacks hurt all businesses deeply in terms of compromised data, integrity, and financial loss. Here is a look at some of the ways cyberattacks can affect your business.
Direct financial losses
Financial losses are the leading and obvious consequence of cyberattacks as money constitutes the main motivation for hackers. These financial losses include fraudulent money transfers, ransom payments after a malware infection, damage payments, and fines the organization has to settle. All the mitigation measures the organization may engage in following a cyberattack involve further costly spending with a long-term impact on the business’s bottom line and profitability.
Response and recovery may require external contractors to work with the internal team for faster backup restoration at a further cost. The organization will have to hire external consultants and auditors to evaluate systems’ vulnerability, including email security, cloud security, etc. They also need to carry out post-breach forensics while also incurring legal and PR costs to deal with potential litigations and regulatory action. A PR campaign to repair dented corporate image will cost the organization beyond the existing budget while the whole incident lowers the company valuation.
The occasioned downtime during the outage will hurt productivity as every hour operations are stopped equates to lost revenues. Major customers may cancel orders due to uncertainty over the likelihood of normal and immediate resumption of operations following a cyberattack.
Depending on the jurisdiction, an organization may have to deal with the risk of multiple civil and regulatory liabilities for breached data. While an organization may pay a few hundred dollars as a ransom for stolen data, the fallout following such a breach is far more costly in litigation payouts and fines. The company may face costly lawsuits from business associates and customers whose data may have been compromised in the incident.
It is better to minimize such liabilities through optimization of the organization’s online platform with the right website plugins that are verified and sourced from authorized developers. This is because cybercriminals cover their tracks by compromising and using intermediate computers such as yours to launch attacks on other victims, leaving you liable unless you can prove otherwise. Unverified plugins from unknown sources provide the gateway for infiltration by hackers.
Customers and business partners affected by the data breach are likely to file civil lawsuits against the organization. Any proof of negligence on your part will cost the company heavily in reparations to the affected customers and business partners. Stolen customer data can expose the organization’s clients to future identity theft, and the responsibility will rest with the company leading to costly payouts.
Loss of productivity
Whatever the industry an organization is in, it is engaged in some form of production and service delivery. The success of this endeavor depends on the efficiency and smooth running of the operating systems without disruptions. A system breach that disables the internal computer network or encrypts vital files will cripple an organization’s operations and curtail production.
Compromised access to business-critical systems shuts down operations, and for some time, there will be zero production or service delivery. As the company grapples with the cost of mitigation and restoration, management has to deal with lost revenue during the downtime as well. Whether the disruption will be short-lived and manageable or prolonged and costly depends on the scale and nature of the cyberattack.
Normal operations will take time before stabilizing as the IT team will continue with the cleanup process, which may slow down productivity. Expect low production levels for the duration of the forensic analysis, cleanup, security reinforcement, and testing of the new systems will be happening. The short form of it is that cyberattacks will leave an organization with low productivity and lost revenue.
Loss of reputation
Businesses spend a lot of money to build a reputable brand in the market and spend even more on sustaining the image. It is this brand image that attracts customers and high-profile business associates happy to do business with a reputable company. Upon this reputation is built trust that all parties dealing with the company bank on for mutual collaboration.
A cyberattack with the possible consequences of the stolen customer and business associates’ data can greatly hurt your business. The consequences can be so serious that some organizations try to conceal the breach when it happens to protect the business name. The problem with this strategy is that the truth might just come out somehow and cause a much worse fallout due to broken trust.
To keep your reputation after a cyberattack is an absolute necessity and one that will cost you financially. You will have to engage marketing and PR agencies to mount campaigns to restore your brand image and assure customers that their data is safe. It may take some doing and time, but honesty from the beginning could be the best option.
Surviving post cyberattack
Not all businesses have survived cyberattacks, and quite a number have been permanently put out of action. The aftermath brings with it substantial financial costs, decreased productivity and loss of revenue, legal liability, and loss of reputation. Businesses that may lack enough resources to mitigate the unexpected downtime and recovery costs suffer fatal consequences never to rise again.
Cyberattacks leave behind a serious business continuity problem for small to medium enterprises unfortunate enough to suffer a hit. To survive this problem, businesses have to incur more costs on beefing up their cybersecurity measures and continue paying more to stay up to date and safe. The upshot of this is that businesses have to develop a vibrant continuity strategy in the event of an attack and invest heavily in cybersecurity.