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August 2, 2015

Hacks could cost UK businesses £1.46 million

The financial threat posed by cyber-attacks is becoming more serious for companies both large and small. The number of businesses affected is on the rise and the average value of a security breach is higher than it was 12 months ago.

Security breaches can cost a business much more than its reputation, according to a new study, and the number of businesses affected by cyber-attacks is on the rise.

According to a government-commissioned report from consultancy firm PwC, British companies could see security breaches leave them out of pocket to the tune of almost £1.5 million – at least for larger organisations. It said that average ‘starting costs’ for major breaches at large firms had more than doubled in the past year alone, growing from £600,000 to £1.46 million.

Whilst the number isn’t quite so high for smaller firms, as a percentage of their turnover it’s still an eye-watering amount. Small businesses suffering with the most extreme security breaches could end up with a bill of £310,000 – significantly more than the £115,000 that a similar breach in 2014 would have cost.

Perhaps unsurprisingly, one in ten companies that had suffered a breach said they’d changed the nature of their business as a result.

90% of large firms and 74% of SMEs affected

PwC also reiterated that the old belief of “that won’t happen to me” is risky at best, and a recipe for total disaster at worst. It claimed that 90 per cent of large organisations had suffered some sort of cyber-attack over the past year, a nine per cent year-on-year increase. It was a similar story for smaller firms – with 74 per cent having fallen victim of an attack, growing from the 60 per cent total recorded in 2014.

Much of this could be attributed to the diversity of devices being used in today’s workplaces. Companies are investing in security for their desktop devices, but neglecting to roll out such measures for tablets and smartphones. There are also intangible risks much more difficult to protect against, like human error. Staff-related breaches have hit 75 per cent of large businesses, a figure that was nearer 60 per cent last year.

Commenting, PWC cyber security director Andrew Miller told “Breaches are becoming increasingly sophisticated, often involving internal staff to amplify their effect, and the impacts we are seeing are increasingly long-lasting and costly to deal with.”