Cybercrime costs US businesses $3.8 million per year, study finds

Tops a high of $52 million a year

A new study of 45 U.S. organizations found that cybercrime -- including Web attacks, malicious code and rogue insiders -- costs each one of them $3.8 million per year, on average, and results in about one successful attack each week.

Is your city a cybercrime center?

"First Annual Cost of Cyber Crime Study," conducted by Ponemon Institute and sponsored by ArcSight, entailed seven months of research and visits to each of the 45 organizations. The participating midsize and large organizations (from 500 to more than 105,000 employees) represent a mix of industries and government agencies. Researchers talked to IT security personnel, as well as network, forensics and management staff, to determine the costs of responding to and mitigating cybercrime attacks. The researchers spent about four weeks with each participating organization, according to Larry Ponemon, director of Ponemon Institute.

The $3.8 million annual cybercrime tally represents an average; organizations reported from a low of $1 million to a high of $52 million per year, according to the study.

The $3.8 million average cost represents not what companies or government might routinely spend each year on say, antivirus software, but the direct cost of coping with the attacks. In the event of a Web-based application attack, such as Web-based SQL injection, "say they bought a Web Application Firewall to respond to that, we'd amortize it," Ponemon says.

Types of cybercrime reported include: stealing intellectual property, confiscating online bank accounts, distributing viruses and other malware, posting confidential business information on the Internet, and disrupting a company's infrastructure.

Researchers tallied the time spent responding to attacks, the disruption to business operations, revenue loss, and the destruction of property, plant and equipment. Sometimes cybercrime attacks came in fast waves against an organization, and financial institutions seem to be targets of the stealthiest types of cyberattacks, such as botnets, Ponemon says.

Defense, energy and financial services companies experienced higher costs than organizations in retail, services and education, according to the report.

Ponemon says those organizations that had invested in defensive technologies, including security information event management, and had a chief information security officer on board, appeared to be better prepared to respond and took less time to remediate problems. But only about 40% could be considered to have invested in this way, he adds.

The study found it took 14 days on average to respond to a successful cyberattack, with an average cost to an organization of $17,696 per day. Malicious insider attacks took up to 42 days or more to resolve.

While the number of companies involved in the study is only 45, and thus the data can't be considered statistically weighty enough to characterize entire industries, the "First Annual Cost of Cyber Crime Study" provides a look at how cybercrime is dragging down U.S.-based companies and government.

"The eye-popping thing we found is a lot of organizations are very disorganized in even understanding the environments they're dealing with," Ponemon says. Ponemon Institute intends to do further studies of this kind in the future, he adds.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags cybercrimelegalPonemon Institutecybercrime costs

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Ellen Messmer

Network World
Show Comments

Father’s Day Gift Guide

Brand Post

Bitdefender 2019

Bitdefender solutions stop attacks before they even begin! Get cybersecurity that 500 MILLION users already have and trust.

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?