While the growing number of data breaches and cyberattacks on companies shows that organisations are often not adequately equipped to protect themselves against such threats, privacy regulations being rolled out in many countries, such as GDPR in Europe and PoPIA in South Africa, means companies that fall victim will face further negative impact in the form of severe financial penalties.
Cyber threats such as ransomware cost businesses US$11,5-billion in 2019. The WannaCry ransomware affected many large organisations, including the British National Health Service (NHS). It affected an estimated 200 000 computers in 150 countries and caused damages estimated to be in the billions of dollars. Other popular ransomware attacks include CryptoLocker, CryptoWall, TeslaCrypt and SamSam, among a host of others. The cost has ballooned to $20 billion in 2020, with major companies such as Canon, Foxconn, Garmin and Travelex being affected.
And this is just the tip of the cyber threat iceberg. Beyond ransomware, cybercriminals are engaging in social engineering, phishing or spear phishing, carrying out distributed denial-of-service (DDOS) attacks, exploiting software vulnerabilities (especially when not kept updated), strategically compromising company websites to access sensitive data (using tactics such as SQL code injection) or even adding ransomware to a particular organisation's website as a way of targeting other companies that it works with (known as watering hole attacks).
If hackers from outside weren't enough, organisations must also deal with insider threats from current, past or temporary employees or even third parties such as suppliers and customers, where loss or theft of data could be accidental, negligent or malicious.
Organisations need more than just a wall
Business growth today is driven by technological innovations: we’re more interconnected than ever, with our networks connecting mobile devices and Internet of Things (IoT) devices by the millions. In addition, IT is becoming more software-defined and more of it is moving to the cloud in order to meet expectations of seamless remote working, making cybersecurity critical.
Organisations need to start off with a comprehensive risk assessment that helps identify the threats that they face, what controls need to be put in place. They can deploy various technologies – such as network and infrastructure security as well as endpoint security – to prevent or reduce the impact of cyber risks, depending on what they deem to be an acceptable level of risk.
To achieve this, they need specialised technical staff who are equipped with the latest skills and qualifications to ensure that appropriate controls, technologies and practices have been implemented. However, not all organisations have access to such skills though and it is imperative that they work with a trusted partner – that can enable businesses and remote workers with connectivity, hardware, software and managed services – in order to be able to fight off the latest cyber threats.
A company’s employees are critical to the success of their cybersecurity efforts. Everyone in the business needs to be aware of their role in preventing and reducing cyber threats, whether it is handling sensitive data, understanding how to spot phishing attacks – data shows that 95% of hacking attacks start with phishing or spear phishing emails – and ensuring that security policies are adhered to when working from their own devices.
Despite best efforts, data breaches and losses still do happen and companies need to be adequately protected. More recent offerings in the market such as cyber insurance cover businesses against financial loss, disruption and reputational damage that result from cyber-attacks. It covers software and data and it protects against liability arising from the misuse of and third-party attacks on, IT infrastructure. This includes data breach expenses, extra costs and loss of income, as a result of insured incidents.
Furthermore, putting proper processes in place is crucial in defining how the organisation's activities, roles and documentation are used to mitigate the risks to their information. These processes also need to be continually reviewed: cyber threats change quickly and processes need to adapt with them. But processes are nothing if people don’t follow them correctly.
Financial impact of cyberattacks
Overall, organisations – and the IT departments within them – face the tall order of effectively managing their security risk while also supporting growth. A further challenge is the introduction of privacy regulation in several regions, such as GDPR and the Protection of Personal Information Act (PoPIA), which requires organisations holding data of their citizens to put sufficient measures in place to safeguard this data and holds them accountable in case of a data breach that results in the theft or leaking of personal information.
In South Africa, the penalties for failing to comply with PoPIA include a maximum of a R10 million fine or imprisonment for a period not exceeding 10 years or both, for serious offences; and a fine or imprisonment for a period not exceeding 12 months or both, for less serious offences. PoPIA was put into full effect on 1 July 2020, with local organisations being given a year’s grace period initially. The Information Regulator has stated that there will be no further exemptions, meaning that local businesses have less than a month to ensure they are compliant with the full regulation.
Fines placed on companies found to be in contravention of regulations can vary according to region. For the GDPR, it is up to €20 million, or 4% of the firm’s worldwide annual revenue from the preceding financial year, whichever amount is higher. Similar amounts are listed for the UK GDPR and Data Protection Act. Prominent companies that have been fined for data breaches at their organisation include Equifax ($575 million), Uber ($148 million), Yahoo ($85 million), Google ($7,5 million) and British Airways (£20 million).
On top of this, there is still the cost of the root cause analysis into the attack, identifying areas for improvement and making the changes. With costs potentially running into the millions, hundreds of millions or even billions, organisations need to do more than pin their hopes on protections built in within operating systems and basic firewalls and antivirus software. They need to take an holistic and proactive approach to defending their networks, devices, software and data from attacks, loss or unauthorised access by using people, technology and processes to create strategies to protect data, ensure business continuity and safeguard against reputational and financial loss.
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