According to the third annual study of US companies, the occurrence of cyber attacks has more than doubled over a three-year period, while the financial impact has increased by nearly 40%.
Conducted by the Ponemon Institute and sponsored by Hewlett-Packard (HP), the 2012 Cost of Cyber Crime Study finds that the average annualised cost of cybercrime incurred by a benchmark sample of US organisations was $8.9 million. This represents a 6% increase over the average cost reported in 2011, and a 38% rise over 2010.
The 2012 study also reveals a 42% increase in the number of cyber attacks, with organisations experiencing an average of 102 successful attacks per week (compared to 72 attacks per week in 2011 and 50 attacks per week in 2010).
“Organisations are spending increasing amounts of time, money and energy responding to cyber attacks at levels that will soon become unsustainable,” said Michael Callahan, vice-president for worldwide product and solutions marketing, enterprise security products at HP.
“There is clear evidence to show that the deployment of advanced security intelligence solutions helps to substantially reduce the cost, frequency and impact of these attacks.”
Most costly forms of cybercrime
The most costly cybercrimes continue to be those caused by malicious code, denial of service, stolen or hijacked devices and malevolent insiders. When combined, these account for more than 78% of annual cybercrime costs per organisation.
Additional key findings of the research are as follows:
- Information theft and business disruption continue to represent the highest external costs. On an annual basis, information theft accounts for 44% of total external costs, up 4% from 2011. Disruption to business or lost productivity accounted for 30% of external costs, up 1% from 2011.
- Deploying advanced security intelligence solutions can mitigate the impact of cyber attacks. Organisations that deployed security information and event management (SIEM) solutions realised cost savings of nearly $1.6 million per year. As a result, these organisations experienced a substantially lower cost of recovery, detection and containment than those that had not deployed SIEM solutions.
- Cyber attacks can be costly if not resolved quickly. The average time to resolve a cyber attack is 24 days, but according to this year’s study the process can take up to 50 days. The average cost incurred during this 24-day period was $591,780, representing a 42% increase over last year’s estimated average cost of $415,748 during an 18-day average resolution period.
- Recovery and detection remain the most costly internal activities associated with cybercrime. On an annual basis, these activities account for almost half of the total internal cost, with operating expenses and labour representing the majority of the total.
Quantifying cybercrime’s economic impact
“The purpose of this benchmark research is to quantify the economic impact of cyber attacks and observe cost trends over time,” said Dr Larry Ponemon, chairman and founder of the Ponemon Institute.
“We believe a better understanding of the cost of cybercrime will assist organisations in determining the appropriate amount of investment and resources needed to prevent or mitigate the devastating consequences of an attack.”
In conjunction with this third annual study of US companies, cybercrime cost studies also were conducted in Australia, Germany, Japan and the United Kingdom.
Now, HP is set to host a series of webinars highlighting the findings from these studies, with the US-focused webinar taking place on 7 November. Additional information about this webinar, and those taking place in other regions, is available on the Hewlett-Packard website.
HP’s premier Europe, Middle East and Africa client event, entitled ‘HP Discover’, takes place from 4-6 December in Frankfurt, Germany.