Data security breaches can negatively impact an entire organisation – including sales, marketing and IT – and have a significant negative impact on company finances and shareholder value. In fact, security breaches rank in the top three most powerful threats to brand reputation, following terrible customer service and environmental disaster.
A recent Ponemon institute study found that the stock value index of 113 companies declined an average of 5% the day the breach was disclosed, with companies also experiencing an average 7% customer churn. What’s more, 31% of consumers impacted by a breach stated they would discontinue their relationship with an organisation responsible of leaking their data. These are pretty significant numbers we’re talking here! Data breaches are very real business and bottom line concerns. The fallout can be significant, and may even be a reason to relieve the C-suite of its duties.
And while I promise I won’t mention GDPR being just around the corner with its mandatory breach notification requirement at all in this blog article (promise!), the study did also find a direct correlation between a data breach stock decline, customer churn, revenue loss and an organisation’s security posture. It’s quite interesting to know that many companies are currently getting their ducks in a row to find out the best way to improve their data privacy posture and address these (new) re-enforced data regulation requirements. Oh boy, I mentioned it… sorry!
It’s also been demonstrated that the better security posture and cyber hygiene were in place prior to the attack (the better cyber-aware they were, in fact), the quicker businesses fully recover the share price they enjoyed immediately prior to the breach.
But make no mistake – it takes a minimum four month period to recover in full, guaranteed.
On Wednesday June 14th, a ransomware attack hit University College London. The university released a statement shortly after the attack, reading: “Currently it appears that the initial attack was through a phishing email, although this needs to be confirmed. It appears the phishing email was opened by some users around lunchtime today. The malware payload then encrypted files on local drives and network shared drives”.
On June 27th following the Wannacry ransomware international campaign, another major cyberattack dubbed Petya hit a number of major firms. These included food and beverage firm Mondelez International Inc, US law firm group DLA Piper LLP and shipping and oil company AP Moeller Maersk AS, infecting computers and demanding sums in Bitcoin for access to files. The global reach and considerable impact of the current Petya malware outbreak bears remarkable similarities to the WannaCry attack of just a few weeks ago.
Sharing an update on July 6th on the ransomware attack that hit the company, Mondelez International, one of the world's largest snacks companies with 2016 net revenues of approximately $26 billion and ownership of brands such as Cadbury, Hollywood Chewing Gum, LU, Milka, and Oreo, issued a statement saying that this cyber incident will trim three percentage points from the company’s Q2 revenue growth after disrupting its ability to ship and invoice for four full days. Shares were off 1.9% after a matter of hours.
On July 8th, Danish shipping giant Maersk, which handles one in seven containers shipped globally, said the company had lost more than 80% of its data in the cyberattack and stopped taking bookings until the problem was solved. The shipping line is not taking bookings in 76 countries and, since the cyberattack, importers have faced gross losses of £120 million in three weeks. In fact, the servers that support their 1,500 applications are still not responding properly.
As you can see, these are really significant numbers hitting companies’ bottom lines. 2017 is probably the most cyber dangerous year so far – we’re only seven months into 2017 and have seen an inordinate number of cybersecurity meltdowns.
To contain the infection, IT teams generally block access to shared drives and get infected devices out of the network as quickly as possible to mitigate malware from spreading any further. Initial investigation findings may also demonstrate that the infection started as a result of users visiting a website that had been compromised. Clicking on a popup or even simply visiting a compromised site may have then introduced the malware to the devices. Ransomware attacks like Petya have become such a common pestilence that many companies are now reportedly stockpiling Bitcoin in case they need to quickly unlock files that are being held hostage by ransomware.
Fast reaction is crucial when facing such mass outbreak, but prevention is better than cure. With strong and up-to-date security measures, companies can dramatically reduce the risk of ransomware infection.