Cyberattacks account for losses up to $1 trillion every year

A  new joint report released on Monday by security firm McAfee and the Centre for Strategic and International Studies has shown that the estimate in global annual losses due to cybercrime ranges from $300 billion up to a staggering $1 trillion.  

The authors of the report have stated that the annual costs of cyberattacks is problematic because some companies don’t reveal the details of their losses, while others are unaware of the exact value or nature of the information that has been stolen from them.

The new report places the losses faced in six categories, namely, the loss of intellectual property, cybercrime, loss of business information, service disruptions, the cost incurred while securing networks against hacking as well as the damage a hacked company faces to its reputation. 

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While talking about this, the report’s authors stated that, “We use several analogies where costs have already been quantified to provide an idea of the scope of the problem, allowing us to set rough bounds - a ceiling and a floor - for the cost of malicious cyber activity, by comparing it to other kinds of crime and loss.”

A new report by McAfee shows that cybercrime accounts for up to $1 trillion in global losses

One of the examples that the report uses compares the cost incurred due to hacking with the losses a country’s automotive industry faces due to car crashes. In the US, the report states that car crashes cost the country in a range of $99 billion up to $168 billion per year, which amounts to around 0.7 percent to 1.2 percent of the Gross Domestic Product. Compared to that, cyberattacks set the country back anywhere between $24 billion to $120 billion per year, which is around 0.2 percent to 0.8 percent of the GDP. The report also states that job losses faced in the US due to cyberattacks stands at 5,08,000 annually.

In the past, McAfee had placed the global losses due to cyberattacks at a much higher number. In 2009, a MacAfee report stated that data theft and breaches from cybercrime were costing businesses a total of $1 trillion globally. Now, the company has tempered the global damage due to lost intellectual property and expenditure to include the low-end figure of $300 billion, which can range up to the mammoth $1 trillion figure. 

This is not the first study done to see the impact that hackers have on the global economy. Talking about the amount of data that hackers can get their hands on, a study released by Team Cymru in February has said that overseas hackers get away with as much as one terabyte of data per day from governments, businesses, militaries and academic facilities.

In the joint report that MacAfee released, the authors say, “Cyber espionage and crime slows the pace of innovation, distorts trade, and brings with it the social costs associated with crime and job loss. This larger effect may be more important than any actual number and it is one we will focus on in our final report.”