Understanding the economic impact of a breach

As cyberattacks evolve, the damage they create will grow—and there are the direct and hidden, unexpected costs of a data breach. The job of IT and security professionals is to minimize the risk of these costs occurring. But what if the nightmare scenario comes true?

In a new panel, cybersecurity expert Dennis Chow and Louis Evans, senior product marketing manager for Arctic Wolf Network, discuss how public sector and critical infrastructure leaders can better detect and respond to cyber threats. They discuss why adopting new security operations approaches can help organizations can minimize both economic and operational impacts and the steps organizations should take to mitigate these costs.

Evans emphasizes the importance of organizations understanding the full set of impacts they may experience in the event of a cyber incident. “It’s surprisingly common for IT teams and leadership to lack perspective…these teams find themselves in a position to be unable to scope their defense and their response appropriately,” says Evans. Without this perspective, organizations may underestimate the costs and allocate inadequate resources for defense and response. This can lead to underinvestment in security and ineffective incident response.

Chow expands on the costs organizations should expect in the near and long-term following a security breach. He says, “The issue is that they don’t compartmentalize the analysis of assessments or breaches or previous incident response systems from either themselves or third parties. They really need to break it down into different pillars.”

These include administration and PR expenses, litigation costs, third-party restoration costs, compliance violations and insurance costs. He also highlights the need to consider indirect costs like talent retention and opportunity costs. Chow mentions that cyber insurance is becoming more comprehensive and costly, requiring organizations to invest in incident response capabilities and cyber simulations.

When asked about preparing to weather the storm and shoulder the costs of a data breach, Evans and Chow stress the importance of comprehensive planning and foresight. They recommend conducting tabletop exercises and simulations to identify potential vulnerabilities and gaps in the response process. They also emphasize the need to involve key stakeholders from different departments and simulate realistic breach scenarios to ensure preparedness. Additionally, organizations should allocate resources for breach costs, regularly review their cyber insurance coverage, and implement automation and visualization tools to streamline response efforts.

Organizations should adopt a proactive approach to breach preparedness by understanding the full scope of costs, conducting simulations, involving key stakeholders, and implementing the right technology solutions. By taking these steps, organizations can better mitigate cyber threats’ economic and operational impacts.

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This video panel discussion was produced by Scoop News Group and CyberScoop and underwritten by Arctic Wolf Networks.