Last year saw prominent cyber attacks on some of the world's largest companies. Google, Yahoo!, Sony and even Dairy Queen were not immune to theft and sabotage caused by hackers infiltrating their computer systems.
Small businesses are not safe either when it comes to cyber attacks on their data, trade secrets or bank accounts. A recent report released by PricewaterhouseCoopers looked at the increase in cyber attacks over the last year and how it has become a persistent threat not just to governments, but also to businesses large and small.
What is the scale of the threat?
In a survey of more than 9,700 security, IT, and business executives, detected cyber security incidents in the US were reported to be as high as 42.8 million, an increase of 48 per cent from 2013 alone.
Big companies were more likely to report having fallen victim to a cyber attack, but according to the report this was mainly due to having better detection systems. Small business in the US often had a perception that they were not targets, but hackers often viewed small businesses are a means to get into their much larger partner companies sharing the same systems.
Large corporations saw an average loss of $5.9 million from cyber attacks last year, with smaller companies losing on average $0.41 million. According to research by the Ponemon Institute, the cost of cyber theft for a company each year can range anywhere from $0.5 million to $61 million.
Who are the main sources?
Cyber theft can come from both inside and outside your business. Current employees were overwhelmingly the biggest culprits at 35 per cent, according to the report. Former employees were also common sources of cyber theft at 30 per cent, and current contractors or service providers stood at 18 per cent.
The report stated that the number may be much higher as 75 per cent of surveyed respondents said they handled insider cyber crimes internally rather than by legal means.
The percentage of attacks from outside competitors came in at 25 per cent, while hackers and organised criminals were at 24 per cent and 15 per cent respectively. A series of costly attacks on US retailers last year was achieved by these types of criminals gaining access to payment networks and electronic point-of-sales systems.
Companies are learning that as most information is now stored electronically, it is easier and cheaper to steal intellectual property from a competitor than to develop their own. These cyber criminals can use more sophisticated technology, or methods as crude as bribery and recruiting former employees of rival companies.
While have sophisticated but expensive defensive technology was one way to help stop cyber attacks, having comprehensive business insurance that covers cyber crime is another way to prevent financial catastrophe from an increasingly common business hazard.