Security experts say the fact that data breaches at FTSE 100 firms cost on average £120 million in market value should be a wake-up call for boards to ensure they have an adequate cyber security strategy.

Security experts say the fact that data breaches at FTSE 100 firms cost on average £120 million in market value should be a wake-up call for boards to ensure they have an adequate cyber security strategy

Cyber attacks on top UK companies are leading to losses of 1.8% of share price or £120 million on average, according to a study on the effects of data breaches on share prices.
This has doubled in the past 18 months, according to the report released by global advisory firm Oxford Economics and IT and business process services firm CGI.
The report is based on a study of 65 severe or catastrophic breaches at FTSE 100 companies in the past four years and indicates that investors are now punishing companies more harshly for cyber attacks.
The cyber value connection report, which is aimed at helping senior business people understand the impact of cyber breaches on company market value, reveals that investors have lost at least £42bn since 2013 due to the severe public domain cyber security incidents used for the study.
However, the report notes that this figure includes only 65 publicly known severe breaches, which means the true amount of company value lost due to cyber attacks is likely to be far higher.
The report examines factors such as how new regulations for mishandling data will also strongly impact the public visibility of future breaches and therefore how organisations will plan for, manage and report cyber crime as incidents continue to rise.
A good example of the effects of data breaches on company value is Yahoo, which was forced to discount by $350 million the sale price of its core business to Verizon after revelations of data breaches in 2013 and 2014 affecting one billion and 500 million accounts, and of hackers forging cookies to gain access to customer accounts.
The cost of cyber attacks to investors is likely to skyrocket in the near future, said Rogoyski, as the General Data Protection Regulation (GDPR) and Network Information Security (NIS) directive mean that firms dealing with European citizens’ data must disclose all breaches of that data.
They estimate that only around 10% to 20% of the major breaches companies suffer in Europe are currently made public, so lost shareholder value across European markets could rise by as much as a factor of 10 when the new regulations take effect in May 2018.

CGIís recommends eight steps to achieve effective cyber security governance:

1. Appoint someone at board level to be responsible for cyber security with the authority and know-how to address the risks and demonstrate leadership during times of crisis.
2. Include cyber security on every board agenda, reporting on: risk to the business, nature of sensitive data and mitigation progress at a minimum.
3. Treat cyber security as a company-wide business risk and assess as you would with other key business risks such as major safety issues, environmental disasters and accounting scandals,
4. Ensure that the company understands the rapidly developing legal landscape that applies to cyber risk ñ in particular, begin preparing for the GDPR and NIS directive now.
5. Get specialist expertise to advise and inform the board, whether from internal teams or external advisors.
6. Set a programme of work to manage cyber risk, allowing a realistic time and budget.
7. Encourage discussion about risk appetite, risk avoidance, risk mitigation and cyber security insurance.
8. Assume you have already been breached but you might not yet know about it. Take action to reassure yourself no such attack has taken place, but plan on the assumption that they have.

So if you want to save yourself stress, money and a damaged reputation from a cyber incident please ring us now on 01242 521967 or email or complete the form on our contact page NOWContact Cyber 139

Leave a Reply