McAfee report says cybercrime to cost world economy over $1 trillion

The growing cybercrime incidents now cost the world economy more than $1 trillion, or just more than one per cent of global GDP, which is up more than 50 per cent from a 2018 report that put global losses at close to $600 billion, leading cybersecurity firm McAfee revealed on Monday.

Two-thirds of surveyed companies reported some kind of cyber incident in 2019 and the average cost was more than half a million dollars per incident.

IP theft and financial crime account for at least 75 per cent of cyber losses and pose the greatest threat to companies, according to the report conducted in partnership with the Center for Strategic and International Studies (CSIS).

The report. titled ‘The Hidden Costs of Cybercrime,’ also explored the damage reported beyond financial losses, revealing that 92 percent of businesses felt there were other negative effects on their business beyond financial costs and lost work hours after a cyber incident.

“The severity and frequency of cyber attacks on businesses continues to rise as techniques evolve, new technologies broaden the threat surface, and the nature of work expands into home and remote environments,” said Steve Grobman, SVP and CTO at McAfee.

“We need a greater understanding of the comprehensive impact of cyber risk and effective plans in place to respond and prevent cyber incidents given the 100s of billions of dollars of global financial impact.”

Damage to companies also includes downtime, brand reputation and reduced efficiency and 56 per cent of surveyed organisations said they do not have a plan to both prevent and respond to a cyber-incident.

Out of the 951 organisations that actually had a response plan, only 32 per cent said the plan was effective.

The system downtime was a common experience for around two thirds of respondents’ organisations.

The average cost to organisations from their longest amount of downtime in 2019 was $762,231, said the report based on interviews with 1,500 IT and business decision makers online.

Thirty-three per cent of survey respondents stated that IT security incident resulting in system downtime cost them between $100,000 and $500,000.

“As a result of system downtime, organisations lost, on average, nine working hours a week leading to reduced efficiency. The average interruption to operations was 18 hours”.

According to the report, it took an average of 19 hours for most organisations to move from the discovery of an incident to remediation.

Nearly 26 per cent of the respondents identified damage to brand from the downtime experienced because of a cyber-attack, the McAfee report mentioned.