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According to rough estimates, cyber-attacks cost global businesses around 8 trillion dollars in 2023. Data indicates that things will get even worse in 2024, with potential damages amounting to 9.5 trillion. Some of the attacks were so ferocious, effectively closing a few popular brands.

Given the sheer number of cyber threats in modern business, companies should implement effective threat hunting. By relying on a team of IT experts and advanced AI software, you can detect incoming threats and address them before they cause any damage. Introducing proper measures is especially vital in this day and age as hackers and malicious programs are more and more vicious.

To have a better understanding of this issue, we’ve decided to explain the financial consequences of cyber threats. After that, we’ll also go through the best tactics that will help you stave off incoming attacks.

Financial Impact of Cyber Attacks

When we talk about malicious web attacks, most people focus on direct financial damages. While these types of losses can’t be neglected, companies also lose money in other ways.

1.     Direct Losses

As mentioned, direct losses are the easiest issue to comprehend. A vigilant company will spend enormous amounts of money to introduce proper security measures. When an attack does occur, they will spend some extra time mitigating the attack, thus reducing the consequences.

But spending money on software and IT experts isn’t the only direct loss that companies occur. They might also have to spend money on fees and fines caused by data leakage. Losing sensitive customer information, in particular, is perceived as a major risk for companies as the EU and the US government severely punish this infraction.

2.     Reputation Damage

To piggyback on the previous section, data loss can cause a major hit to the brand’s reputation. In fact, the long-term effect of reputation damage usually trumps immediate financial losses. Even your most loyal clients might turn your back on you, and it will become significantly harder to onboard new clients.

As if that wasn’t enough, it’s really hard to contain the news of data breaches. Influencers jump at the opportunity to share this information on social media, with even top-tier PR agencies having trouble stopping the spread.

Restoring positive reputation is especially hard for brands that have invested years and years of build it. You’ll have to increase your marketing spending several times over, which is why it’s usually more viable to simply start things over with a new business.

3.     Operational Disruption

During a cyber attack, things tend to get hectic in the office. People are forced to focus on things they usually don’t do in order to trace back the origin of the attack. To make matters worse, they might have limited access to software and systems they use on a daily basis.

The loss of productivity can be felt throughout the company, causing teams to miss their deadliness, affecting responses to customers, and slowing down product delivery. If a business has time-sensitive operations, the stalling can hit them like a ton of bricks.

4.     Cyber Insurance

Given that cyber threats have become more and more common, companies are forced to spend enormous amounts of money to insulate themselves. They spend lots of money on insurance as a way of mitigating potential risks. Even if you never get hit by a hacker group, you’ll still lose money in the process.

The cost of cyber insurance for small businesses ranges from $1,000 to $7,500. Of course, these prices go up exponentially if we’re talking about medium or large companies. What’s worse, if you ever get hit by a malicious attack, the insurance company will likely increase the cost of coverage as well as the requirements.

5.     Cyber Security

Besides insurance, you’ll also have to spend lots of money on an IT team. Unfortunately, while these experts cost a pretty penny, they can’t completely negate the impact of external attacks. You’ll also have to consider that they’ll require a separate department and office space, which will lead to additional costs.

It’s also advisable that you upgrade your current software. Nowadays, there are lots of great AI solutions that will help you with these tasks, although most of them are quite expensive. Besides hiring IT experts, you will have to spend money on employee training.

Reducing Cyber Risks

Due to these financial costs, you should introduce proactive measures that will prevent or at least soften the blow of cyber attacks:

  • Update your software on a regular basis. That way, you can be certain that you’ll be ready for the newest incoming threats
  • Replace solutions that no longer receive regular support as they simply can’t address modern AI-based attacks
  • Provide continuous employee training. Teach your staff how to recognize phishing threats and how to protect their password and devices.
  • Safeguard your outbound data by encrypting it. Make sure that your employees don’t accidentally disclose information to external entities
  • Restrict access to your data. Only people with proper training should access the company information. Furthermore, make sure there’s a well-structured hierarchy so that everyone knows who’s responsible for what
  • Use strong passwords and avoid using the same passwords over and over again. Instruct your employees to keep their password reminders safe at home and in public
  • Set a limit to the number of times a person can log into an account. That way, an external entity won’t attempt a breach several times
  • Avoid storing clients’ sensitive information, especially when it comes to credit cards. Having this information can only cause you trouble if you’re breached
  • Have external backups that are independent of your main systems. Make sure to create backups every once in a while if your data gets wiped clean by an external attack

Last Thoughts

If you want to stave off all these threats, you’ll have to introduce proper measures and train your staff. Only when everyone’s on the same page can you expect to mitigate these risks without incurring any damages.