Customer Confidence: Hiscox Reveals Growing Cost of Attacks
As organisations race to embrace cutting-edge technologies and expand their digital footprints, they find themselves increasingly vulnerable to a myriad of cyber risks.
Yet amid the fear of a disruption to operations or a ransomware on their data, organisations may be losing track of the fact that cyber attacks can damage customer confidence.
This is reflected in the Hiscox Cyber Readiness Report for 2024, which paints a concerning picture of the current cyber threat landscape. Although staggering 67% of organisations globally reported an increase in cyber incidents compared to the previous year, the true impact of these incidents extends far beyond the immediate technical and financial repercussions.
The rising tide of cyber incidents
The report reveals a dramatic shift in how cyber attacks affect customer relationships.
In 2024, 47% of organisations struggled to attract new customers following a cyber attack, more than doubling from 20% in 2023. Similarly, the loss of existing customers jumped to 43% from 21% the previous year.
These figures highlight a growing trend: customers are increasingly wary of entrusting their data to organisations with a history of security breaches.
The erosion of customer confidence in the wake of cyber attacks represents a seismic shift in the business landscape.
"In today's business environment, protecting the reputation of any business is just as critical as safeguarding the physical assets,” says Eddie Lamb, Chief Information and Security Officer at Hiscox.
Not only must they protect their systems and data, but they must also preserve the trust and confidence of their customer base.
The impact of negative publicity following a cyber incident has also intensified, affecting 38% of businesses compared to 25% in 2023.
This increase in reputational damage underscores the public's growing awareness and concern about data security.
In an age where information spreads rapidly across social media and digital platforms, a single cyber incident can swiftly tarnish a brand's image, potentially undoing years of careful reputation building.
The innovation imperative
As businesses grapple with these challenges, they find themselves at a crossroads of innovation and security.
The integration of emerging technologies, particularly Gen AI, presents both opportunities and risks. The report indicates that 70% of surveyed businesses have implemented Gen AI in their operations, with 56% expecting it to affect their cyber security risk profile.
"In today's business environment, protecting the reputation of any business is just as critical as safeguarding the physical assets.”
This technological adoption highlights a critical skills gap, with 34% of organisations reporting that their cyber security measures are compromised due to insufficient expertise.
The relationship between innovation and security has become central to business strategy, with 26% of organisations citing cyber risk management as a key driver of their innovation plans.
Navigating the path forward
In light of these challenges, organisations must adopt a holistic approach to cybersecurity that goes beyond mere technical solutions.
"Businesses need to see technological innovation and cyber security as complementary, rather than conflicting, forces,” says Eddie.
This perspective is crucial for developing strategies that not only protect against cyber threats but also build and maintain customer trust.
Investing in expertise to manage emerging technology risks is paramount. However, equally important is fostering a culture of cyber awareness throughout the organisation.
"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,” Eddie explains.
As cyber attacks continue to pose significant risks to operational continuity and customer confidence, the ability to effectively manage these threats will undoubtedly become a key differentiator in the competitive business landscape of the future.
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