Data breaches cost companies millions of pounds in market value, according to leading experts. Cyber attacks on companies in the UK result in a 1.8 per cent loss in share prices or, on average, £120 million in market share, showing that adequate security is a must for businesses.
A report published by Oxford Economics and CGI shows that the losses associated with data breaches have doubled over the last 18 months. It looked at 65 data breaches classed as severe or catastrophic at FTSE 100 companies over the last four years.
The findings suggest that firms are now being more harshly punished by investors than ever for security lapses that cause breaches, with the resulting loss of market value increasing dramatically.
Entitled the Cyber Value Connection report, the findings are aimed at helping firms understand the impact that data breaches can have on share prices and so highlight the importance of online security.
This was shown in the fact that since 2013, investors have lost a minimum of £42 billion due to the severe cyber attacks included in the study. However, the true amount lost in company value due to data breaches is likely to be higher, as just 65 such attacks were used in the study.
As well as showing the loss to market share, the report also looks at how the public visibility of future data breaches will be impacted by new regulations. It suggests that the link will be strong and so companies need to start planning for how cyber crime will be reported and paid for in the future, especially as such incidents are becoming increasingly common.
Andrew Rogoyski, vice president of cyber security at CGI in the UK, said: “Cyber security is still a top priority for businesses, but business leaders, policy makers and investors still have work to do to take cyber security risk far more seriously.
“We are beginning to see city analysts, venture capital firms and credit ratings agencies factor cyber security readiness into the way they assess firms. This is positive and should encourage boards across the world to treat cyber security as an enterprise-wide risk.”
Data breaches are a serious problem facing UK companies and the best way to mitigate them is to ensure your first-line defences are as effective as possible. Arrow can help you achieve this with our range of interconnected products and recovery procedures to ensure all data is as safe as possible.