Hidden Costs of a Cyber Attack

Cyber Attack

One of the inherent issues with the internet or cloud computing is the challenges of security. Since businesses have started adopting the cloud, their business operations have been exposed to various sophisticated cyber-risks that can have severe implications on business continuity.

It has become a challenging task for cyber security experts to secure their business network from all the sophisticated cyber risks that are occurring today. A successful security incident can have devastating impacts, which can crumble the entire business operations and create disruptions in the cash flow.

Boardrooms need to have cybersecurity conversations about risk

Determining the risk and understanding the hidden costs of a data breach is essential for the SecOps teams to make strategic cybersecurity decisions.

One of the crucial aspects that CISOs need to consider in determining the influence and magnitude of a potential treats and comparing it with the prevention costs to design an effective cybersecurity posture.

It can be a challenging task for the CISO to determine the true cost of the security incidents until they are attacked. Many enterprises consider the data loss or extortion price as the total loss to the organization.

Also Read: How Enterprises Can Address Cyber Risks in Business Applications

Here are a few hidden costs of cyber-attacks which CISOs need to be aware of and need to calculate while analyzing the impact of the cyber-attacks:

Increased insurance premium

Posts a successful cybersecurity incident, the charges for insurance premiums might increase exponentially, which has a toll on the security budgets. Industry experts consider the factor that influences costs is the willingness and depth of data offered by the policyholder post-incident review. Enterprises need to develop a robust cybersecurity posture based on the valuable insights from the attack to minimize the future impact on the cash flow because of the incident to strengthen their cybersecurity maturity.

Business disruption

One of the top hidden costs of a cyber-attack that is often overlooked is operation disruption. Moreover, many SecOps teams also forget to calculate the costs utilized to recover from the disruption. Rebuilding operations capabilities might need some time which might have a tremendous impact on the business finances. Businesses might have to spend substantial amounts on repairing the equipment, developing temporary infrastructure, and migrating business operations to new servers. If the cyber-attack hacks the entire server, the costs to implement and replace servers are going to be substantially high.

The distrust in customers

Another potential hidden cost of a cyberattack can be distrust in the customers. Because customers today expect a top most privacy for their sensitive data if the data gets exposed to malicious actors can force the clients to migrate their business to the competitors. Client retention is one of the biggest issues that organizations with successful cybersecurity incidents have to deal with.

Intellectual property (IP) Loss

IP loss is the loss that organizations will bear that has severe impacts on trades, copyrights, investment strategies, and other confidential information. Loss of intellectual property will not have the competitive edge the business requires to sustain itself in this digital era. Moreover, the loss of trade secrets can have a potential influence on destructing the business.

Also Read: Three Key Areas in Enterprise Cybersecurity to Focus on Before Entering 2023

Negative brand image

A successful cyberattack on a business network will not only make it challenging for businesses to retain clients but also make it difficult to acquire new clients. Businesses that are a victim of a security incident might have a negative reputation in the market, which makes it challenging for the clients to trust and share their confidential information.

CISOs should consider all the above-hidden costs of cyber-attacks to develop a cybersecurity strategy according to strengthen the business network.

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