Hidden costs are the price to pay when a cyber-attack happens but businesses don’t prioritise cyber security. These costs are like “an accident waiting to happen” or the expense of treating a long-ignored illness after it has already gotten worse.

The costs of a cyber attack are “hidden” because you do not see them (or as a business owner you decide not to) until a cyber incident happens to your business. If you’re happy to pay the price, you don’t even need to worry about cyber threats then! Otherwise, you should invest in cyber security solutions to proactively defend your business.

Coin 1

Hidden Cost #1: Lost Productivity

When a cyber incident happens, one immediate impact is that your operations can get put on hold. Yet, this is one of the most overlooked costs of cyber security. When a cyber-attack occurs, the disruption to your operations can cause your employees to lose valuable work time.

How much does a loss in productivity cost? Consider the value of the output (e.g., your product or service) that will no longer be produced or rendered due to your operations being stopped. Those unproduced outputs can equate to the amount of lost productivity.

Lost productivity can also hugely impact your project timeline. There can be missed deadlines, delayed projects, and decreased efficiency.

To avoid this hidden cost, it’s important to have a solid risk management plan in place. This includes regular risk assessments to identify potential vulnerabilities and address them before they become a problem.

2 Coins

Hidden Cost #2: Downtime & Recovery Costs

Closely related to lost productivity, downtime and recovery also have expenses associated to them. Those include the time and resources needed to restore systems and data, as well as the potential loss of revenue during this downtime.

How much time and money can your professional services business lose? A Statista survey reveals it can take an average of 22 days to get a business back up and running after a ransomware attack has occurred. According to Datto’s Global State of the Channel Ransomware Report, the cost of downtime due to ransomware can be as much as 50 times the cost of the requested ransom.

To avoid these, you must have a disaster recovery plan in place. This should include regular backups of important data and systems, as well as a plan for quickly restoring operations in the event of an attack. A disaster recovery plan can reduce potential losses and the cost of the time and resources needed to get back on track.

3 Coins

Hidden Cost #3: Legal Fees

In the event of a cyber-attack, businesses may possibly face legal implications, fines, and the costs of potential lawsuits. The amount can reach tens of thousands of dollars, which is significant especially for small businesses that may not have the resources to handle the expenses. Add to that the penalties you could face if you were found liable for non-compliance with the Privacy Act 1988 – from $50 million for a business and $2.5 million for individuals such as business owners and other executives.

The solution to that problem lies with cyber liability insurance. This can help cover the costs of legal fees and any damages that may result from a cyber-attack. But of course, it’s better to avoid the legal costs in the first place! You can, in fact, minimise your cyber risks in affordable ways.

4 Coins

Hidden Cost #4: Damage to Reputation

This could be the least visible cost but one with a lingering effect. If customer data gets compromised, it could lead to a loss of trust and credibility, which can further result in:

  • Decreased sales
  • Damage to your brand
  • Difficulties with client acquisition and retention
  • Lost business opportunities
  • Dramatic drop in business value

Some organisations impacted by cyber-attacks such as Costa Group Holdings, Medibank Private, Optus, TPF Telecom, and IPH, saw their share prices go down.

You can minimise the hit on your brand image by implementing a strong cyber security plan then communicating your efforts to your customers and prospects. This can reassure them that you’re taking all the necessary steps to protect their data.

How to Steer Clear of Hidden Costs

While the costs discussed above may be hidden, the investment to prevent them are clear and upfront. For example, with cyber security services or cyber insurance, you know exactly how much you will be spending (or at least deviations can be minimal) and what you’re getting.

Also, you have control over reducing your cyber risks. You can have regular risk assessments, strengthen your cyber protection measures, create a disaster recovery plan, or take other proactive measures.

The real question to ask yourself is can you afford not to invest in cyber security for your professional services business?

Boost Your Cyber Security (Cairns firms can do these)

Here are some quick actions you can do right now:

Remember: Better be safe now than be sorry later!