McAfee released a new global report titled “The Hidden Costs of Cybercrime,” which focuses on the significant financial and unseen impacts that cybercrime has worldwide. The report, conducted in partnership with the Center for Strategic and International Studies (CSIS), concludes that cybercrime costs the world economy more than $1 trillion, or just more than one percent of global GDP, which is up more than 50 percent from a 2018 study that put global losses at close to $600 billion. Beyond the global figure, the report also explored the damage reported beyond financial losses, finding 92 percent of companies felt effects beyond monetary losses.
“The severity and frequency of cyberattacks on businesses continues to rise as techniques evolve, new technologies broaden the threat surface, and the nature of work expands into home and remote environments” said Steve Grobman, SVP and CTO at McAfee. “While industry and government are aware of the financial and national security implications of cyber-attacks, unplanned downtime, the cost of investigating breaches and disruption to productivity represent less appreciated high impact costs. We need a greater understanding of the comprehensive impact of cyber risk and effective plans in place to respond and prevent cyber incidents given the 100s of billions of dollars of global financial impact.”
The Hidden Costs of Cybercrime
The theft of intellectual property and monetary assets is damaging, but some of the most overlooked costs of cybercrime come from the damage to company performance. The survey revealed 92 percent of businesses felt there were other negative effects on their business beyond financial costs and lost work hours after a cyber incident. The report further explored the hidden costs and the lasting impact and damage cybercrime can have on an organization, including:
Companies Unprepared for Cyber Incidents
Through the research and analysis, the report found a lack of organization-wide understanding of cyber risk. This makes companies and agencies vulnerable to sophisticated social engineering tactics and, once a user is hacked, not recognizing the problem in time to stop the spread. According to the report, 56 percent of surveyed organizations said they do not have a plan to both prevent and respond to a cyber-incident. Out of the 951 organizations that actually had a response plan, only 32 percent said the plan was effective.
The report concludes with key ways for businesses to deal with cybercrime. These include uniform implementation of basic security measures, increased transparency by organizations and governments, standardization and coordination of cybersecurity requirements, providing cybersecurity awareness training for employees, and developing prevention and response plans.
Download a full copy of the Hidden Costs of Cybercrime report for a complete analysis of the research as well as visual representations of the data.
McAfee commissioned independent technology market research specialist Vanson Bourne to undertake the research that this report is based on.
Between April and June 2020, the quantitative study was carried out, interviewing 1,500 IT and line of business decision makers. Respondents came from the US (300), Canada (200), the UK (200), France (200), Germany (200), Australia (200) and Japan (200). Respondents’ organizations have 1,000 or more employees and were from all sectors except construction and property. However, only IT decision makers were interviewed in the Government sector.
Interviews were conducted online using a rigorous multi-level screening process to ensure that only suitable candidates were given the opportunity to participate.
Additionally, CSIS utilized a survey of open source material on losses accompanied by interviews with Government officials, and an estimate adjusted by national income levels using International Monetary Fund (IMF) income data to determine the cost of cybercrime.