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Cybercrime Costs to Reach Heights of £1 Trillion in 2022

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Cybercrime costs to reach heights of £1 trillion in 2022

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Overview of Cyber Security

Cyber security has become an increasingly important function in recent years as it has climbed its way up the list of top business concerns in 2022. The ever-evolving and present threat of cyber-attacks is estimated to cost businesses and institutions up to £1 trillion, encompassing both financial losses and cybersecurity spending. According to McAfee, this expenditure represents a 50% increase over 2018.

Cyberattacks have become a serious, frequent threat acting as one of the biggest contributors to business interruption. The cost of cybercrime in 2022 is estimated to be $8.44 trillion worldwide and projected to reach to $23.84 trillion in 2027 according to Statista. The sudden boom in ransomware attacks and phishing scams, which reinforced the concern of cyber incidents, stemmed from employees working remotely during the pandemic - 62% of UK-based SMEs experienced an increase in cyber threats in the last two years only.

Remote working gave cybercriminals the desirable opportunity to prey on business vulnerabilities. Popular incidents such as phishing emails and malware attacks have led firms to fall victim to double extortion tactics, data breaches, and extensive software exploitations.

With technology constantly evolving, hackers have become more sophisticated, advancing their techniques and approaches. Due to these factors, new attacks are continually developed and implemented in time, to rival the momentum of emerging tech.

Financial Impact of Cyber Attacks

The total financial impact of cyber attacks in 2021, including losses and spending, from firms and institutions reached its highest average in 17 years, highlighting the substantial economic impact of cyber attacks. Studies, however, have shown that the faster an organisation can respond to a breach, the smaller the expense will be. IBM’s Cost of a Data Breach Report found firms who can identify and respond to cyberattacks within the first 200 days can reduce cyber security costs to businesses by £1m.

Growth of Cyber Crime

McAfee’s £1 trillion estimate derives from the monetary losses incurred during an attack alongside the amount spent on preventative tactics. During a breach, as well as dealing with security implications, firms are hit financially on account of investigating costs, unplanned business downtime, and productivity disruption. This grossly outweighs costs of cyber security measures, which often involve new hires and functions within the business, computer security software, as well as brand and reputation rehabilitation. The staggering cost accounts for an estimated spend of 90% on cybercrime and 10% on prevention, respectively.

Companies Unprepared for Cyber Threats

A successful cyber-attack can evoke mistrust and damage to your reputation. However, despite this and the rapid growth in cyber threats, many firms are still not prepared or equipped to deal with them. According to an IT Governance study, 48% of executive managers admitted their employees had not received cyber security training, with even fewer firms at 32% reporting to have no cyber security function within their organisation.

A few companies have found themselves as repetitive victims of cyber scams. Building resilience against this type of business interruption has become a competitive advantage for firms.

There is now higher importance placed on incident response plans due to the high levels of business interruptions encountered in 2021. A lack of uncertainty and processes will minimise the impact of breaches and reduce the time taken to get back to business as usual.

Cyber Attacks in a Conflict Climate

We have seen in 2022 how severe cyberattacks can get when they are involved in macro events such as political conflicts. The Ukraine-Russia war is a prime example of this: since warnings of an imminent attack were announced, Russian-based cyber threats increased by 800% in 48 hours. This has resulted in the monitoring of additional online activity and threat tools, coupled with new implementation of evolving techniques. Firms have been forced to refocus on their cybersecurity as they anticipated financial and business implications.

An example of this is the NotPetya malware attack against Ukraine in 2017. This cyber incident resulted in an estimated $10bn of economic damage, leading to several big companies such as Maersk, FedEx, and Merckb being affected.

According to Microsoft’s Digital Defence Report, Russia is accountable for 58% of all known nation-state cyber attacks, with the top three target countries being the US, Ukraine, and the UK. In February 2022, amid the Ukraine war, Russia’s formidable cyber forces aimed to impose a never-before-seen, wiper malware on Ukraine's ministries and financial institutions - a cyber attack which was detected by Microsoft.

Ever since the beginning of the conflict, Western countries have been gearing up for what would arguably be some of the biggest cyber risks known in recent times. Energy, finance and communications infrastructures have been actively preparing themselves against potential threats, as a result of their country’s stance on the conflict and economic sanctions against Moscow.

In anticipation of this, businesses have been compelled to assess their risk and operations, ensuring that their infrastructure could recover promptly with minimal damage. Expenses have increased accordingly as firms have been racing to secure online systems and to protect digital information and customer data. This may present itself in different forms: updating software, antivirus protection, staff training or even third-party programmes such as authenticators or cyber security firms readjusting supply chains and business operations.

Looking Ahead

Navigating the cyber landscape has become increasingly difficult and consequently expensive. We have found that firms are placing greater attention on data protection but more needs to be done beyond simply preventing breaches. Tremendous importance lies in organisations creating processes to respond to and recover from incidents.

As the year progresses, there are few signs of cyberattacks slowing down; in fact, the age of cyber warfare has only begun. As we proceed in a digital-centric world, evolving technologies will only add to the expansion of unconventional threats, and firms will need to stay ahead of the curve to avoid crippling business operations.

As cyber threats become more sophisticated, organizations need to build out their cyber security teams by bringing in the help of qualified professionals. Cyber security specialists are highly trained technology experts who can evaluate a company’s systems and develop strategies to protect them from malicious attacks. These specialists understand the latest threats and have specialized tools to detect and prevent any attacks before they can cause damage. They can also help organizations design and maintain a secure network infrastructure that meets the latest industry standards.

Organizations should invest in a qualified specialist to ensure their systems are safe and secure, this can be done effectively through the use of a cyber recruitment firm. Investing in a strong Cyber security department will prove to be cheaper and safer long term. Security teams provide invaluable expertise and services that can help protect an organization from financial losses or reputational damage caused by cyber-attacks.


How Much Does Cybercrime Cost the UK Economy?

Cybercrime is a growing problem in the UK, with the cost to the economy estimated to be around £27 billion a year. This figure includes the cost of lost data, stolen money, and damage to businesses’ reputations. Cybercrime also affects individuals, with victims of online fraud losing an average of £1,200 each. The UK government is taking steps to tackle cybercrime, including investing in cyber security research and introducing new laws to protect consumers.

How Does Cybercrime Affect the Society?

Cybercrime affects society in a variety of ways. It can lead to financial losses, identity theft, and the spread of malicious software. It can also lead to the disruption of essential services, such as banking and healthcare. Cybercrime can also have a psychological impact on victims, with many feeling violated and vulnerable. Furthermore, cybercrime can lead to the erosion of trust in online services, which can have a negative impact on the economy.

Why Does Cybercrime Cost Businesses Money in The UK?

According to the National Cyber Security Centre, cyber attacks cost British organisations an average of £4.5 million per attack between 2017 and 2019. This financial impact can be even greater if sensitive customer data is stolen or compromised. In addition to financial losses, business reputations can be tarnished and customer trust can be eroded.

The financial cost of a cyber attack can include compensation payments, ransom payments, legal costs, and lost productivity or revenue. It is also important to consider the financial costs of investing in security measures to prevent future attacks.

Who Does Cybercrime Affect?

Cybercrime affects individuals, businesses and governments around the world. Individuals can become victims of cybercrime through identity theft or fraud. Businesses can lose valuable data or have their systems hacked and disrupted which can lead to financial losses. Governments are often targeted by criminals seeking political leverage or access to sensitive information. Cybercrime is a global problem that affects the security and safety of everyone. It is important for individuals, businesses and governments to take steps to protect themselves.


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