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New Report Reveals Spiraling Cost of Cyberattacks

A new report from Radware has provided insights into the threat landscape in 2018 and the spiraling cost of cyberattacks. The report shows there has been a 52% increase in the cost of cyberattacks on businesses in since 2017.

For the report, Radware surveyed 790 managers, network engineers, security engineers, CIOs, CISOs, and other professionals in organizations around the globe. Respondents to the survey were asked about the issues they have faced preparing for and mitigating cyberattacks and the estimated cost of those attacks.

The 2018 Threat Landscape

93% of surveyed firms said they had experienced a cyberattack in the past 12 months. The biggest threat globally was ransomware and other extortion-based attacks, which accounted for 51% of all attacks. In 2017, 60% of cyberattacks involved ransoms. The reduction has been attributed to cybercriminals switching from ransomware to cryptocurrency mining malware.

Political attacks and hacktivism accounted for 31% of attacks, down from 34% in 2017. The motive behind 31% of attacks was unknown, which demonstrates that attackers are now more purposeful about hiding their motives. 27% of attacks were insider threats, 26% were attacks by competitors, 19% were attributed to cyberwar, and 18% were conducted by angry users. The primary aim of the attacks was service disruption (45%), data theft (35%), and espionage (3%). 16% of attacks had another aim or the purpose had not been established.

One in five businesses reported being attacked daily: A 62% increase year over year. 13% reported weekly attacks, 13% monthly attacks, and 27% experienced one or two attacks in the past year. 19% were unsure how many times they had been attacked.

Healthcare was the second most attacked industry behind the government sector. 39% of healthcare organizations reported having to fend off daily or weekly cyberattacks by hackers. Only 6% of healthcare organizations claimed they had not been attacked in the past year.

The biggest threats were malware and bots (reported by 76% of organizations), social engineering attacks such as phishing (65%), DDoS attacks (53%), web application attacks (42%), ransom threats (38%), and cryptocurrency miners (20%).

Respondents from healthcare organizations felt they were best prepared for phishing and other social engineering attacks (58%), malware, bots and DDoS attacks (55%), and web application attacks (52%). Only 39% felt they were well prepared to deal with ransomware attacks and advanced persistent threats.

The Rising Cost of Cyberattacks

The Radware study asked respondents about the business cost of a successful cyberattack. According to the report, the cost more than doubled compared to last year and is now $1.1 million. Respondents that had a formalized calculation to determine the financial impact of a cyberattack reported the cost to be $1.7 million, compared to $880,000 for those with no formal calculation.

For SMBs with fewer than 1,000 employees, the average cost of a cyberattack was estimated to be $450,000. That rose to $1.1 million for enterprises with between 1,000 and 10,000 employees, and $2.1 million for large corporations with more than 10,000 employees.

The average cost of a successful cyberattack on a healthcare organization was determined to be $1.43 million. Fortunately, most healthcare organizations (82%) had a breach response plan in place, which can limit the cost of a cyberattack.

The True Cost of a Cyberattack

The cost of a cyberattack is likely to be significantly higher than the estimates. Radware notes that the estimates do not factor in direct costs such as extended labor, investigations, and the development of software patches, indirect costs such as the hiring of technical consultants, legal expenses, and stock price drops, and costs associated with the prevention of future cyberattacks.

Other costs that are difficult to calculate are lost revenue, brand reputation damage, and loss of customers – All real possibilities after a data breach. Radware notes that following a successful cyberattack, 43% of respondents said there had been a negative customer experience, 37% suffered brand reputation damage, and 23% reported a loss of customers.

“The cost of cyberattacks is simply too great to not succeed in mitigating every threat, every time,” explained Radware. “Customer trust is obliterated in moments, and the impact is significant on brand reputation and costs to win back business.”

Author: Steve Alder is the editor-in-chief of HIPAA Journal. Steve is responsible for editorial policy regarding the topics covered on HIPAA Journal. He is a specialist on healthcare industry legal and regulatory affairs, and has several years of experience writing about HIPAA and other related legal topics. Steve has developed a deep understanding of regulatory issues surrounding the use of information technology in the healthcare industry and has written hundreds of articles on HIPAA-related topics.