Hackers cost UK business investors £42bn decimating FTSE share prices
Businesses have increasingly come under attack by hackers over the past few years. Massive data breaches, affecting firms’ and customers’ data in the thousands can affect a company’s value. A recent study conducted by Oxford Economics reveals that “severe” cyberattacks have cost UK business investors close to £42bn since 2013.
The study, commissioned by CGI Group, also revealed that cyberattacks can adversely affect FTSE 100 companies’ shares, with an average fall in prices by 1.8%, after a “severe breach”. This translates to a permanent loss of market capitalisation of £120 million, the group said.
The study examined around 315 data breaches, focusing on 65 “severe” and “catastrophic” attacks that targeted seven global stock exchanges since 2013.
The report said, “There is evidence that the impact of cyber attacks on share price has become more pronounced over recent years. Severe or catastrophic cyber breaches appear to produce markedly different impacts across different market sectors.”
The report also pointed out that retail, media and communications firms appear to suffer more cyberattacks because of “account access” and “identity theft”. Whereas the technology and industrial sectors primarily suffer more breaches focused on “financial access”.
Raj Samani, chief scientist at McAfee said, “This latest research revealing the detrimental impact cybercrime can have on an organisation’s market value should serve as a warning to corporations across the globe. Data breaches damage far more than a company’s reputation, often hitting the bottom line hard.
According to CGI UK VP of cybersecurity services Dr Andrew Rogoyski, there’s a “huge difference” between sectors that are targeted for attacks and those that suffer massive breaches.
“Healthcare is an example of a sector that suffers a large number of breaches but isn’t necessarily targeted, because there aren’t many ways to monetise attacks on health companies, yet.” Dr Rogoyski told The Independent.
He added, “Companies that perform financial transactions tend to be targeted because of the potential for cyber criminals to make money out of them.”
Over the past few years, UK businesses have suffered significant breaches, affecting thousands of customers’ data, with payday lender Wonga being the latest victim.
Samani added, “Corporations cannot afford to dismiss cyber security as a problem which just belongs to the IT department. The financial future of a corporation – and often that of its customers – can hinge upon the security of its business and user information.
“It is crucial for executives, including the CFO and CEO, to take an active role in understanding the level of cyber risk they’re exposed to in order to implement an appropriate, effective cyber security strategy. This process should include assessing the value of the company’s data assets and implementing mitigation strategies appropriately proportioned to the level of risk involved.”