The cost of cybersecurity breaches can be significant. The most obvious ones are the costs to your company in terms of both money and time. But breaches also result in a number of other costs that aren’t as obvious and are often either overlooked or underestimated.
These hidden costs include:
1. Human cost: Cybersecurity breaches impact employees in numerous ways. Not only do they tax the IT team who often have to stay up all night and work weekends to respond to an incident, but they also affect the overall morale of the company. There is an emotional impact on those affected by the breach and employees may feel worried or stressed about the situation.
2. Reputation cost: A cybersecurity breach can damage a company's reputation, which can be difficult to repair. Customers may lose trust in the company and be hesitant to do business with them in the future. This can lead to a loss of customers and revenue for the company.
3. Investigation and analysis costs: Investigating a cybersecurity breach can be a complex and time-consuming process, requiring the use of specialized tools and expertise. This can be costly, particularly if the breach involves a large amount of data or a sophisticated attack. Depending on the scope and sophistication of an attack, companies may need to bring in outside experts and capabilities to augment their internal team.
4. Legal and regulatory costs: A cybersecurity breach may result in legal action being taken against the company, either by customers or regulatory bodies. Exposure to this type of risk differs significantly depending on industry and the types of services your company provides but can involve significant legal fees.
5. Customer notification and support costs: If a cybersecurity breach affects customer data, the company may be required to notify affected customers and provide support to them. This can be costly, particularly if the breach affects a large number of customers.
6. Credit monitoring and identity protection costs: If a cybersecurity breach involves the theft of personal data, the company may need to offer credit monitoring or identity protection services to affected customers. These services can be expensive, particularly if they are offered to a large number of customers.
7. Business interruption costs: A cybersecurity breach may result in the temporary or permanent disruption of business operations. This can result in lost revenue and productivity, as well as additional costs associated with reestablishing operations.
8. Loss of competitive advantage: A cybersecurity breach that results in the loss of intellectual property or other sensitive information may give competitors an advantage in the market. This can lead to a decline in market share and revenue for the company.
9. Increased insurance premiums: After a cybersecurity breach, a company's insurance premiums may increase, as it is considered to be at higher risk for future breaches.
10. Employee training and awareness costs: In the aftermath of a cybersecurity breach, a company may need to invest in additional employee training and awareness programs to prevent similar breaches from occurring in the future. This can be costly, particularly if the company has a large workforce.
When taken into account, these potential costs often tip the scale and can create the urgency needed to take action to prevent them from happening.
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