Cybersecurity breaches cost companies billions

The financial impact of data breaches is extending far beyond any ransom payout, with lingering damages to perception being the biggest hit companies are facing. This is impacting shareholders and future revenue.

Specifically, two-thirds of all victims saw an adverse hit to their share price after an attack, with financial service firms taking the biggest hit. A study conducted by cybersecurity consultant CGI and Oxford Economics examined 65 severe-level breaches out of a total of 315 breaches since 2013.

According to the report, attacks have wiped out nearly $52.4 billion in lost revenue, or a permanent loss of 1.8% in share prices. This is in addition to the costs most companies incur to shore up security after an attack. Bottom line: Public perception of an attack matters.

Even though only 10% – 20% of breaches ever make it to the public, the financial costs of updating security and the resulting investigation hit almost every victim that was studied. But the hardest hit were still firms in the financial industry, possibly due to the public’s perception of the sensitive nature of the data the firms are responsible for.

One notorious example of this lingering effect on perception is tech-giant Yahoo. It suffered two major breaches in 2013 and 2014 that are still hitting it financially today, impacting a trade deal with Verizon.

Cybersecurity isn’t just IT’s problem anymore. It takes the whole team to recover after an attack, from IT’s new cybersecurity implementation to marketing running PR campaigns in order to repair the brand’s image. If anything, this report gave IT managers ammunition to take to the c-suite for more support and access to resources.

If it takes the whole team to address the problem after the fact, it’s strong business sense to get the whole team involved in preventing these huge hits to revenue and public perception.