The cost of cyberattacks: how one breach can sink your business

In today's interconnected world, cyber-attacks are more frequent and more dangerous than ever before. Businesses, regardless of their size or industry, are prime targets for cybercriminals. These attacks can cause widespread damage and create long-lasting consequences. Kaspersky analyses the impact of digital attacks on businesses and reveals the key losses that an unprotected business can suffer.

When considering the impact of cyber-attacks on businesses, the first thing to look out for is financial losses. For example, huge financial losses were caused by the attack on Johnson Controls, a key player in building technology, which was faced with a serious ransomware incident by a group of hackers called the Dark Angels. The perpetrators claimed to have stolen 27 terabytes of sensitive data and demanded a ransom of $51 million. The breach caused a severe disruption to the company's systems and caused more than $27 million in damage.

The attack impacted Johnson Controls' business operations, including complications in its billing systems and increased recovery costs. As a company with a global presence, the breach significantly impacted its business relationships and operations.

Below, Kaspersky explores key ways in which a digital attack can harm your business.

Financial losses

Cyber-attacks often lead to direct financial losses. A typical example is ransomware attacks, in which hackers demand payment to restore access to data or steal money directly. This is just the beginning, as there are many other consequences that can indirectly lead to significant financial losses. The latter can easily exceed the damage directly suffered by the company as a result of the attack.

Disruption to the operation of the business

Cyber attacks can disrupt your business. Many businesses depend on their digital infrastructure for day-to-day operations. Breaching systems reduces productivity. In severe cases, some operations can be disrupted altogether for days or even weeks, resulting in lost revenue, reduced quality of service and frustration for customers and partners - which is an additional blow to a company's reputation.

Indirect long-term costs

Even after a cyber-attack has passed, businesses often face long-term financial impacts. Restoring systems, improving cybersecurity infrastructure and managing the legal fallout are just some of the additional costs. Still, lost deals and the blow to customer relationships can take months or years to restore.

Damage to reputation

The trust of your customers is invaluable. A customer data breach can seriously damage your brand's reputation. This loss of trust can lead to customer churn and a long-term drop in demand. In some cases, a simple breach is enough to irreversibly destroy a company's public image.

If your business falls victim to an attack, it can also affect your relationships with partners and suppliers. External partners may lose confidence in your ability to protect the data they share with you. Similarly, critical business relationships may find themselves exposed if you fail to recover quickly or if your systems are compromised.

Legal and compliance issues

With data protection regulations such as GDPR in Europe or HIPAA in the US, a data breach can result in heavy fines. Failure to protect sensitive customer or employee data can lead to penalties and lawsuits. In addition, companies that fall victim to breaches often face long-term legal battles, which increase financial pressure and damage their reputation.

Loss of intellectual property

For many companies, intellectual property is one of their most valuable investment assets. Cyber attacks targeting it can steal product designs, marketing strategies and proprietary information. This is particularly damaging in competitive industries such as technology and pharmaceuticals, where intellectual property infringement can undo years of effort in building a competitive brand.