Cyber Attacks and Their Financial Costs Hitting Companies Harder

Anthony Freed
By | October 08, 2012

Posted in: Network Security Trends

Cyber attacks are on the rise, more than doubling over the last three years while the associated costs to affected organizations has risen a whopping 44 percent during the same period, according to a new study conducted by the Ponemon Institute.

The report reveals that while the pace of attacks is steadily increasing, with an average of 102 successful attacks per week this year over last year's average of 72, the overall financial impact of attacks rose only six-percent in 2012 as compared to a 38 percent increase measured in 2011.

The 2012 Cost of Cyber Crime Study, which is the third in a series of such reports conducted by the security research firm, included data collected from interviews with senior level personnel at 56 organizations in the United States. Similar studies were also conducted in the United Kingdom, Australia, Germany, and Japan.

"The most costly cybercrimes continue to be those caused by malicious code, denial of service, stolen or hijacked devices, and malevolent insiders. When combined, these account for more than 78 percent of annual cybercrime costs per organization," a press release for the report noted.

Other key findings in the study indicate that the loss of sensitive data was responsible for nearly half of the total external costs suffered by a targeted entity, while the loss of productivity from a disruption in business continuity after an attack accounted for about one-third of the costs incurred. The average period of time to resolve a breach event rose to 24 days, up from an average of 18 days measured in 2011.

On the upside, researchers found that organizations which employ advanced network monitoring defenses such as security information and event management (SIEM) solutions "experienced a substantially lower cost of recovery," realizing an average post-event savings of about $1.6 million per year, strong evidence that proactive network security measures can have a significant impact on the corporate bottom line.

"The purpose of this benchmark research is to quantify the economic impact of cyberattacks and observe cost trends over time. We believe a better understanding of the cost of cybercrime will assist organizations in determining the appropriate amount of investment and resources needed to prevent or mitigate the devastating consequences of an attack," Dr. Larry Ponemon stated in the press release.

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