Phishing attacks come in many different forms. From a wire transfer request to a ransomware attack to installing malware in sensitive systems. Each episode aims to steal confidential information, financial gain, or leverage the compromised system as an entry point for future cyberattacks. Lost productivity and the mopping up costs that follow phishing (including BEC and ransomware) eat up most of the overall cost, not payouts to crooks.
Loss of Confidential Information
By exploiting a social engineering tactic like impersonating leadership or a sophisticated spear or whaling attack targeting specific employees, attackers can extract sensitive information or install malware to steal data or ransomware. These attacks can be costly in terms of monetary loss, but also for the reputational damage suffered by a business or even a global brand.
In addition to the cost of resolving an incident, organizations must also pay for lost productivity and increased anxiety among employees. The constant vigilance required to identify phishing attacks and avoid falling victim can be psychologically taxing on employees, resulting in burnout, reduced productivity, and ultimately the loss of talent and knowledge the company needs to thrive. Attackers can use phishing emails to gain critical information from the target, including passwords and account credentials, financial details, or even network access. They can then use this information to carry out a variety of other attacks, such as installing malicious software to target specific systems or individuals in the future or using stolen data for identity theft.
In a 2021 study, Ponemon Institute found that phishing-based attacks have become one of the most expensive threat types to resolve, with the average cost per organization increasing from $3.8 million in 2015 to $15 million in 2017. These costs include cleaning and fixing infected systems and containing phishing-based credential compromises.
Loss of Intellectual Property
A data breach caused by phishing can lead to the loss of valuable intellectual property. This includes proprietary software, manufacturing processes, product design, and more. It could also lead to the forfeiture of first-to-market advantage or a loss in profitability. The damage to your brand reputation from a phishing attack can also directly impact your business. In some cases, it can have a significant impact on your stock value as well. For example, a money transfer company fell for a phishing attack and had $30m stolen from them, resulting in a 17% drop in their stock price.
Phishing attacks are regularly used as a step to bigger attacks, such as business email compromise (BEC) and ransomware. These bigger attacks can lead to even more monetary losses for the organization and damage its brand reputation and client confidence.
Another major cost of phishing is the loss of employee productivity. A study found that the average organization loses 635,343 hours yearly due to phishing attacks. This is a combination of lost productivity, security-related work, and the time spent trying to mitigate the effects of phishing. To help reduce these costs, organizations should implement security awareness training and create a culture where employees feel comfortable reporting incidents without fear of repercussions.
Loss of Customer Confidence
For many businesses, the most significant cost of phishing attacks is the loss of customer confidence. Customers and business partners who lose faith in a company due to data breaches, phishing attacks, or other security incidents may not do business with that organization again. This can have a devastating impact on a company’s bottom line.
Phishing attacks use psychological tricks to trick targets into giving away account credentials or other sensitive information. They often use a sense of urgency to make the target act quickly and without thinking. For example, attackers might send emails claiming their account has been compromised or telling them to change their password immediately to prevent unauthorized access.
Cleaning up and fixing infected systems and forensic investigations are the most time-consuming tasks companies face when they fall victim to a phishing attack. These costs are compounded by the lost productivity of employees who must deal with the aftermath. A single phishing attack can result in hundreds of hours of wasted employee productivity yearly.
Organizations must do all they can to mitigate these risks. But they should also avoid creating a blame-orientated culture, whereby employees are afraid to report attacks for fear of retaliation or appearing incompetent. Instead, building a people-first cybersecurity culture that focuses on helping employees do the right thing is better.
Loss of Productivity
Phishing scams are incredibly disruptive to employees’ work. They can cause the loss of a significant amount of time, ultimately leading to reduced productivity. This can be in the form of the physical costs associated with phishing attacks or, more importantly, the cost of lost opportunities and decreased efficiency due to a data breach or cyberattack.
A classic example of a phishing attack is a fraudulent email that appears to be from a well-known bank and asks victims to log in to their accounts by clicking a link. When users do so, they are sent to a fake website and enter their username and password. The criminal then uses this information to breach the victim’s system or account.
There are various phishing attacks, ranging from mass-market email phishing to spear phishing and whaling. Spear phishing is when attackers do research on a specific person or enterprise and craft a more personalized message to get them to reveal confidential information or download malware or ransomware. Whaling is a highly targeted version of spear phishing where an attacker pretends to be a corporate leader, such as a CEO, to gain access to their network and steal sensitive information.
Companies that fall prey to phishing attacks may face class-action lawsuits. This is especially true if the organization has sensitive client data or personal information that was compromised. To avoid these risks, organizations should adopt a supportive and trusting culture where employees feel comfortable reporting phishing emails without fear of punishment or embarrassment.
Also Read: What are Credential Theft Attacks