Cyber attacks affect business reputation as well as finances, says insurer
An annual report from Hiscox found that as the number of cyber incidents on businesses increase, so do challenges around attracting customers.
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Businesses which are experiencing an increase in cyber incidents are also finding it harder to attract customers, a report has said.
Hiscox’s annual cyber readiness report said it found that among companies impacted by cyber attacks, almost half said they had faced considerable challenges attracting customers compared to the previous year.
The study said the concern over reputational damage was influencing decisions made by firms to make ransomware payments – something cyber security experts urge companies and individuals not to do as it is no guarantee of resolving the issue.
According to the report by the insurance company, 70% of firms in the UK said they have experienced more cyber incidents in the past 12 months than in the year before that, and 46% said they had suffered issues attracting customers since, while 43% said they have lost existing customers.
Meanwhile, 38% said they had experienced bad publicity and 21% had lost business partners.
All of these figures were higher than in 2023.
Eddie Lamb, chief information and security officer at Hiscox, said: “In today’s business environment, protecting the reputation of any business is just as critical as safeguarding the physical assets.
“Businesses will spend not only years, but also thousands – if not millions – of pounds, building their reputation, only to see it destroyed in minutes following a cyber attack.
“It is vital that businesses continue to foster an environment where cyber education is a continuous process, ensuring every member of the organisation understands the critical role they play in maintaining cyber security.”
The report also found concerns around the preparedness of businesses to handle the increasing number of cyber incidents, with 37% of UK businesses saying they felt their cyber security measures were compromised due to a lack of expertise in managing the risks associated with emerging technologies, which are rapidly being adopted.
“Businesses need to see technological innovation and cyber security as complementary, rather than conflicting, forces,” Mr Lamb said.
“Business leaders will need to continue to invest in attracting the right expertise to manage emerging technology risks if they are to not just survive, but thrive, in a world of expanding technologies with their reputations intact.”