Understanding the Impact of Cyber Attacks on Your Business

In 2024, the average cost of a business data breach worldwide increased by 10% to $4.9 million, and 40% of breaches that occurred involved data stored in several locations.¹ Companies that stored data in public clouds experienced the highest average costs of a breach, at $5.17 million.¹

Businesses are adopting and using artificial intelligence (AI) at a rapid rate, which can help enhance cybersecurity. Perpetrators, however, now use AI to speed up attacks and infect AI models to skew outcomes or learn and adapt to system vulnerabilities.²

Cybersecurity doesn't only affect the industry giants. Every business, large or small, is at risk. If your business uses technology and creates and stores data, you are at risk of cyber threats.

The rapid evolution of technology and the steep costs of attacks make cybersecurity a top priority. Keep reading to explore common types of attacks and their impact.

Common Types of Cyber Attacks on Businesses

Ransomware attacks were the most common attacks in 2024, with nearly 6 in 10 businesses experiencing an attack.³ The second most common attacks were network intrusion, especially these types:³

• Man-in-the-middle (MIM), in which an attacker intercepts communication and secretly steals or changes information
• Distributed denial of service (DDoS), in which an attack directs fake traffic to a server to overwhelm it and shut it down
• Computer worm, a malware program that replicates and spreads between computers

Phishing scams and business email compromise (BEC) attacks are also common. In the latter, culprits use email to impersonate other people within their targets' company in order to convince them to send money or data. In each of the past three years, BEC attacks have affected almost 22,000 people annually in the United States.³ Over the past decade, more than 300,000 separate BEC incidents have occurred around the world, costing tens of billions of dollars in losses.⁴

Cyber attacks can come via a third-party vendor or contractor, or through the account of a member of the organization itself. Additionally, cyber criminals are now able to use AI tools to create fake websites, emails or videos to convince people to share banking or login details.²

Immediate Operational Impacts

Threats and attacks impact many areas of a business, including operations. An attack can lead to system downtime, which stops production. In modern business, a large portion of work depends on technology in some form, so a paralyzed system puts all work at risk.⁵

Businesses might also experience data encryption or loss that blocks access to critical assets, or supply interruption that delays deliveries. Customer-facing outages, such as outages for web or mobile platforms or point-of-service (POS) devices, also interfere with businesses' ability to continue operating.

According to a 2024 IBM report following the impacts of data breaches that occurred between March 2023 and February 2024, businesses that were able to return to normal took, on average, more than 100 days to do so, and most weren’t able to fully recover.⁵

Financial Impacts

The fallout from inadequate cybersecurity is often expensive. The costs and effects of a successful cyber attack come in phases, starting with direct costs.⁶ The initial attack often leads to steep ransom payments and expensive data-recovery services. Indirect costs may also show up rapidly via lost revenue, a dip in stock prices or customer churn.⁶

For many companies, the impacts eventually lead to regulatory fines, legal settlements and high insurance premiums.

Legal and Compliance Consequences

International, state and federal regulations mandate that businesses notify customers or users about data breaches. These regulations include the following:

• The General Data Protection Regulation (GDPR) is a European privacy law that governs the collection and processing of personal information
• The California Consumer Protection Act (CCPA) is a state law that regulates which data businesses can collect from consumers
• The Payment Card Industry Data Security Standard (PCI DSS) ensures that businesses securely accept, process and store credit cards
• The Health Insurance Portability and Accountability Act (HIPAA) is a health privacy law that protects sensitive personal information

Each state has its own requirements.⁷ However, once a business notifies the government and consumers about a breach or attack, the repercussions quickly follow. Depending on the circumstances, a business may face government investigations, monetary penalties, lawsuits from customers, shareholder litigation and legal actions from partners and vendors. Failure to report and notify may lead to fines or criminal charges.⁸

Reputational and Brand Damage

Consumers expect organizations to safeguard their personal information, and an attack can erode customer trust and loyalty. The public may become vocal about their disappointment, leading to social-media backlash. Additionally, some industry regulations, such as healthcare laws, require you to alert the media to a breach.⁷ That can lead to negative press and impact investor confidence and market perception.

Human Capital and Cultural Effects

The process of recovery and restoration is stressful, and that stress may filter into the workplace culture, causing a decline in morale and loss of productivity. Leadership teams may also need to launch layoffs or hiring freezes to help offset the high costs of an attack, which puts an additional burden on the remaining workers.

Additionally, a poorly handled incident may lead to blame instead of learning, fostering an unhealthy environment. These concerns can lead to even more stress, beginning a feedback loop that causes a harmful cultural shift for the entire organization.

Long-Term Strategic Impacts

A business that sustains a cyber attack may feel its effects in its long-term strategies. For instance, leadership may need to divert a significant amount of all budgets toward recovery, which may delay product launches or stall research and innovation.⁹

Unfortunately, recovery downtime allows competitors to capitalize on the relative absence from the market.⁹ Corporate strategy may lean more toward risk-averse decisions, which may also hamper expansion, especially as the business may come under deeper scrutiny from the government, investors and consumers.

Quantifying the Cost of a Cyber Attack

Understanding the real potential cost of a cyber attack is complex, mostly because attacks themselves are complicated. A business may experience something it couldn't predict, or have silent failures or losses that aren’t clear until much later on.

A few benchmark metrics, however, can help organizations compare and measure the potential cost of an attack on business:

• Cost-per-record: $201 for the cost of losing one piece of sensitive data, depending on the industry¹⁰
• Cost-per-incident: the lowest average is $394,000 for each breach¹⁰

Return on investment (ROI) can also measure the success of cybersecurity investments through metrics, such as breach costs vs. investment costs, reduced downtime rates or higher customer retention rates.¹¹ With advanced training, business leaders can learn to predict and weigh the costs and benefits of cybersecurity investment.

Protect Consumers and Your Business

Cybersecurity is critical in today’s digital-forward business landscape, and companies need trained experts more than ever. Yeshiva University’s online Master of Science in Cybersecurity program dives deep into cybersecurity tools and strategies to anticipate and thwart threats. Contact an admissions outreach advisor to learn more about gaining the knowledge and experience that will help you succeed in any cybersecurity role.