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Hacking attacks on businesses don’t just result in the loss of highly sensitive information - they can see a company’s share price take a tumble too, new research suggests.
Research by Oxford Economics and CGI found that a firm’s share price falls by an average of 1.8 per cent - on a permanent basis - following a severe breach, meaning the typical FTSE 100 firm is worse off by an average of £120 million.
While cyber security is high on the corporate agenda, some bosses are not fully aware of the real implications of data breaches, CGI said.
Using the Gemalto Breach Index, a listing of publicly disclosed cyber security breaches, Oxford Economics analysed 315 cases of data breaches, 65 of which were classed as “severe and catastrophic”, since 2013 across seven stock exchanges.
The research found that investors have lost at least £42 billion since 2013 as a result of severe cyber security incidents.
However, speaking to the Independent, Dr Andrew Rogoyski, vice president of cyber security services at CGI, said there is a massive difference between industry sectors targeted for attacks and those suffering major cyber breaches.
“Healthcare is an example of a sector that suffers a large number of breaches but isn’t necessarily targeted, because there aren’t many ways to monetise attacks on health companies yet,” Dr Rogoyski said.
“Companies that perform financial transactions tend to be targeted because of the potential for cyber criminals to make money out of them,” he added.
Dr Rogoyski said some company chiefs are not completely aware of how vulnerable they are to a cyber attack, and that cyber security is often under-funded within companies because it isn’t seen to have an impact on financial performance.
Andrew Gilchrist, from international law firm K&L Gates LLP, told the Independent that a firm’s response to a cyber attack can only be as good as its preparation for it.
“Once a breach has occurred, the clock is ticking and a business will only have a short period of time to instruct cyber specialists, lawyers, PR managers and insurers, while at the same time react to fulfil its regulatory obligations and position itself in the best way possible to respond to, and mitigate, any potential regulatory investigation and media scrutiny,” Mr Gilchrist said.
“Experience shows us that the real threat to UK businesses is not necessarily a fine from the Information Commissioner's Office. This is a drop in the ocean compared to the bad press and loss of customer confidence that often follows a cyber hack.”
The Cyber Defence Capability Assessment Tool (CDCAT) provides a comprehensive tool for organisations to assess their cyber defences and identify any vulnerabilities they may have. As the frequency of attacks increase, the tool is an essential method to mitigate any threats cybercriminals pose.