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In February of 2024, CNN reported a massive case of financial fraud using deepfakes. A finance worker was tricked into sending $25 million to a group of scammers after partaking in a conference call. During the video call, the worker saw his colleagues and executives discussing an urgent business deal. Believing the interaction was real, the worker wired $25 million to the fraudsters not realizing the entire call was a deepfake.
The fallout from a cyber attack can be devastating for businesses. Financial losses from data breaches and operational disruptions are just the tip of the iceberg. Businesses also face reputational damage, as customer trust takes a major hit. Legal ramifications from data privacy regulations can add another layer of complexity. Even after recovery, businesses must invest heavily in bolstering their cybersecurity defenses to prevent future attacks. The evolving landscape of cyber threats, with AI increasingly used by attackers to automate and personalize attacks, makes this a continuous battle.
How can businesses protect themselves from scams, and can AI development services be of any help? What types of cybercrime can jeopardize your business? And what are the consequences of cyber attacks? In this article, we’ll discuss the different types of cyber threats, their implications, and prevention measures.
According to Statista research, cybercrime is expected to soar in the next four years. In today’s digital age, cyberattacks pose a constant threat to businesses of all sizes. The consequences can be crippling, leading to financial losses from stolen data or disrupted operations. Beyond the immediate costs, reputational damage from compromised customer information can be severe and long-lasting. The evolving tactics of cybercriminals are particularly concerning, with AI being used to automate and personalize attacks, making them even harder to detect and prevent. To safeguard their future, businesses must prioritize robust cybersecurity measures that stay ahead of this ever-changing threat landscape. At the same time, AI in security can also be used to protect businesses against cyber attacks. Regardless of the type of attack, businesses and individuals are left to deal with a multitude of severe repercussions. From financial losses to reputational damages and beyond, let’s investigate the consequences of cyber attacks.
Among the biggest cyber attack effects are financial losses. Monetary gain is one of the most popular reasons for targeting individuals and businesses which leads to substantial losses. Criminals can steal sensitive data like bank details, personally identifiable information, and various credentials, or demand ransom to gain access to valuable data. From losing money to hackers to mitigating the impacts of cyber threats and paying legal fees and fines, organizations experience significant damages to their financial situation.
Equifax is a credit reporting agency based in the US that paid out over $1.35 billion to customers who were victims of a cyber attack. After failing to patch up vulnerabilities in their systems, the company was attacked by hackers, which led to the exposure of 143 million customers’ confidential data.
Experiencing a data breach can lead to the severe downfall of a company’s reputation. Once user data gets exposed and leaked to wider audiences, customer trust is broken forever. Recovering from security breaches and earning trust back is an extremely difficult process. With the high costs of customer acquisition, jeopardizing your reputation is a risky scenario that you should try to avoid at all costs.
One of the biggest scandals associated with reputational damages occurred in 2015. Ashley Madison is a dating site that targets married individuals looking for an affair. The company received a threat from a hacker group stating it would publicize user data, exposing millions of people. After ignoring the threat, the hackers released the personal information of over 30 million users, including addresses, names, and financial data. Considering how important confidentiality was for the business, Ashley Madison lost its reputation after the scandal, never to regain it again.
Aside from monetary gain, cybercriminals can also go after valuable intellectual property (IP), including trade secrets, research and development information, and other sensitive data. These findings can be either sold or utilized to outcompete you in the market. Potentially, you can lose your competitive advantage, which will eventually lead to financial losses.
American Superconductor Corporation (AMSC) experienced IP theft in 2011 when its largest client Sinovel stole its proprietary wind turbine control software and sold it. This situation led to devastating consequences, including a decrease in the stock price, legal costs, and lost business opportunities.
Among other common effects of cyber attacks are disruptions of services and operations. While you’re looking for the source of the attack and trying to mitigate its impacts, your systems may need to be shut down for a period of time. This unplanned downtime will result in lower productivity, missed business opportunities, and delays in services. Additionally, this period of stagnation will impact revenue, which puts an even larger threat to organizations.
Maersk is a prominent example of the volume of disruptions cyber attack can cause. After suffering a ransomware hack, the company’s shipping operations were halted across the world. It took Maersk nearly two weeks to fully recover from the data breach, which led to substantial backlogs, delays, and financial burden.
In case the data breach was preventable and was caused by non-compliance, a company can be fined and even charged. Failure to adhere to privacy laws and industry standards can result in lawsuits and various regulatory penalties. From class action lawsuits from affected customers to consequences of cyber attacks issued by GDPR, HIPAA, and other authorities, you may end up in a lot of legal turmoil.
Anthem is a medical insurance firm that fell victim to a data breach exposing sensitive information of almost 80 million patients, including social security numbers, names, and other data. The investigation revealed the company’s failure to implement access controls and data encryption, as well as its failure to comply with HIPAA protocols.
When government and large financial institutions experience data breaches, cyberattack consequences may become critical. If hackers gain access to information pertaining to national defense or security, the entire country’s sovereignty might be affected. Such targeted attacks can disrupt essential services like healthcare and public safety, which can lead to colossal implications for every citizen.
Only a few organizations possess data related to national security, and theUS Office of Personnel Management (OPM) is one of them. Data breaches that took place in 2015 involved the lead of investigation records of over 20 million citizens. Not only did the breach include highly confidential data, it also gave foreign adversaries leverage for blackmail and espionage.
Finally, the psychological impact of cybercrime should not be understated. Dealing with restoring sensitive data, blocking bank accounts, and trying to save your funds and protect information can take a serious toll on a person’s psyche. You may experience stress, anxiety, fear, guilt, and an array of other emotions that may leave a long-lasting impact on your mental health.
In 2014, Sony Pictures underwent one of the biggest data breaches that exposed confidential data and some unreleased content including the infamous movie The Interview. A comedy about the assassination of a North Korean leader, it is thought to be among the main reasons for the hack. As a result, thousands of employees faced personal threats, public scrutiny, and criticism.
While cybercrime continues to rise, the types of attacks are also evolving. In this section, let’s go over the most popular types of cybercrimes, identify methods of mitigating them, and discuss the common consequences of cyber attacks.
Deepfakes are pieces of media that have been digitally altered to replace the subject of the video with another. Based on AI technology, deepfake combines two concepts: namely deep learning and fake. For example, one can take an existing video of a person performing a certain action and replace it with another person, creating a fake piece of content. The most recent case occurred in early 2024 when a hacker impersonated a Hong Kong company’s CFO and partook in a video conference call which led to a $25 million loss.
Unfortunately, deepfakes are mostly used for malicious purposes such as spreading false information, defrauding people, or propagating ideas. Much like in the above-mentioned case, this technology can be leveraged to obtain money or information. Deepfakes can be used to manipulate election data, develop social engineering scams, create false identities, automate disinformation, and much more.
Spotting deepfakes can be a challenging task but there are some tips that can help you protect yourself and your assets. Most tips revolve around facial expressions and suggest paying close attention to unnatural movements. For example, unusual eye movement or lack of blinking can be a good sign. However, it can be difficult to judge these factors as people present with different mannerisms and gestures.
Malware is a program designed to obtain the victim’s sensitive information or damage their digital assets. It’s among the most ubiquitous types of cybercrime with 4.1 million websites being infected by malware at any given time. There are a few types of attacks that fall under this category, including spyware, trojan viruses, and worms.
In 2013, Target was infected with malware exposing 40 million debit and credit card records and 70 million customer records. Hackers hacked the company’s computer system and network capturing data from the unencrypted memory system. Aside from significant financial damages, Target suffered a large hit to its reputation.
To prevent malicious software threats and avoid the consequences of cyber attacks, scan email attachments before opening them, put restrictions on removable media like USB devices and CDs, and create a solid permissions management system. Additionally, make sure to run regular updates on your operating systems, applications, and other software to eliminate potential exploits and vulnerabilities.
Ransomware attacks are forms of malicious software that demand ransom from the victim in exchange for their data. Cybercriminals take over the person’s information and lock them out of their computer system to incentivize the victim to pay ransom money. The attack works by encrypting files using an encryption key that remains on the criminal’s server. After the ransom payment is completed, the attacker grants the victim access to their information.
Although the costs of ransomware attacks have dropped in recent years, numerous businesses and individuals are still vulnerable to these crimes. In 2020, the tech giant Cognizant went through a massive ransomware hack resulting in large revenue losses. The attackers encrypted the company’s computer system and infrastructure, forcing Cognizant to go offline for a period of time. After the breach, numerous clients had to reconsider their trust in the organization and the security of their data.
Unfortunately, this type of cyber threat is extremely difficult to detect and mitigate once it takes place. To protect your assets, it’s recommended to implement preventive measures. From employee training to robust cybersecurity management, focus on developing strategies and incident response plans to minimize the outcomes of such attacks.
DDoS attacks are also quite commonplace and especially affect businesses and organizations. Cybercriminals attack the website with an excessive amount of traffic that the server cannot handle. While the company deals with the cyber attack effects, criminals can plant malware and other types of threats to obtain money and steal data. Basically, DDoS attacks are often used as a distraction to keep the IT team busy while the attackers go further inside the system.
Carphone Warehouse once received an overwhelming amount of traffic causing the system to slow down. In the meantime, the hackers continued their attacks and extracted sensitive customer information like names, addresses, and bank details. The repercussions of the hack were severe for the company’s reputation and revenue, from the costs associated with the investigation to customer notification, and more.
You can safeguard your data from DDoS attacks by monitoring internet traffic, creating a solid incident response plan, and continuously evaluating the company’s cybersecurity strategy. Furthermore, it’s recommended to assess cyber incidents and improve the existing strategy after each attack.
Phishing attacks are a form of social engineering aimed at acquiring the victim’s sensitive information. Phishing scams usually come in the form of emails or messages disguised as a trustworthy business or individual. By pretending to be an official letter from a known organization or a friendly message from a close friend or relative, cybercriminals gain the victim’s trust.
In the email or message, the attacker usually asks the victim to follow a link to a malicious website or directly send their confidential information. When the victim opens the link, the website may look indistinguishable from the original, yet it belongs to the criminals. Entering personally identifiable information on this page can lead to identity theft, loss of funds, and other cyber attack effects.
Twitter (now X) also fell victim to a phishing scam in 2020 when attackers targeted employees with a sophisticated social engineering campaign. After gaining access to high-profile accounts, hackers promoted crypto scams, which allowed them to raise significant funds.
You can minimize the chances of falling victim to a phishing attack by studying received emails before opening any links or files. Keep in mind that official businesses never request personal data via emails, messages, or phone calls. Carefully check the website’s URL as most attackers will use a similar name to the original with a minute alterations.
CATO is a form of identity theft where cybercriminals illegally obtain employees’ credentials to log into their business accounts and access sensitive business data. Companies that deal with large amounts of personal user data like finance, media, healthcare, and other industries are more susceptible to this type of attack.
In 2019, one of Nikkei’s employees was tricked by hackers into transferring nearly $30 million to an overseas account. The bank complied with the request, believing in the legitimacy of the transaction. The company faced a lot of scrutiny from stakeholders, investors, and clients due to its subpar security system.
To protect your business from the impacts of CATO cyber threats, enable multi-factor authentication (MFA) to securely authorize users via phone numbers, tokens, biometric data, etc. Additionally, consider registering domains similar to your corporate domain to prevent criminals from disguising themselves as your representatives.
To minimize or even eliminate the majority of cybercrime and avoid dealing with cyber threats impact, develop a robust and resilient cybersecurity risk management strategy. Additionally, stay up to date with the latest cybersecurity news and adapt to the changing environment. These and other tips will be explored in this part of the article.
Companies provide software updates not only to deliver new features or better interfaces but also to patch any security vulnerabilities that criminals may exploit. In fact, if your software provider neglects to issue regular updates, consider cutting ties with them. Make sure to update your software, plugins, browsers, and operating systems as soon as this option becomes available.
Even in personal cyber security, selecting a strong password can be a game changer. However, for a company handling large volumes of sensitive data, ensuring good cybersecurity hygiene is critical. A well-defined cybersecurity policy is your company’s shield against cyber threats. It outlines clear expectations for employee behavior online, protects sensitive data, and ensures everyone is on the same page when it comes to security protocols. The policy should emphasize strong password practices, such as requiring complex passwords with a minimum length, a combination of uppercase and lowercase letters, numbers, and symbols. Encouraging the use of unique passwords for different accounts and prohibiting password sharing are also crucial elements in fortifying your organization’s cyber defenses. By implementing a comprehensive policy with these measures, you proactively safeguard your business from cyber attack consequences.
Regular vulnerability assessments allow companies to identify weak spots in their infrastructure and address them before a security breach takes place. You can also utilize data breach monitoring tools to continuously track your systems and flag suspicious activity.
The principle of least privilege dictates that users should have access only to data they absolutely need to perform their duties. Granting access to excessive information makes your entire system more vulnerable to cybercrime. If a hacker obtains one employee’s credentials, they can now explore all the files and data. Cut their journey short by minimizing access to only essential information.
A big portion of cyber attacks can be traced back to internal sources. Sometimes completely benevolently, employees may open a file or click a link, thus exposing their information to hackers. Educate your employees about the ways to safeguard their data and avoid the effects of cyber attacks. From explaining the common types of data breaches to teaching them basic cybersecurity trends and best practices, make sure your workers are up to date.
Another method of mitigating the impacts of cyber threats is developing coherent and strong incident response plans. Even if you do everything right and follow strict procedures, the risks of getting hacked persist. The document should address the concrete steps of dealing with the security incident, the roles and duties of stakeholders, and data recovery plans. Additionally, it must contain information about which organizations should be informed in case of a data breach.
Finally, you can minimize the effects of cyber attacks by collaborating with a trustworthy and reliable IT partner. However, do thorough due diligence to choose an agency with sufficient experience and knowledge about cybersecurity and your industry specifically.
Cybercrime poses a huge risk to your business, assets, funds, and reputation. Cyber attack consequences can potentially jeopardize the entire organization. Take a proactive approach and partner up with an agency to develop a sound cybersecurity strategy and avoid complicated and costly repercussions.
Our team at NIX, a software development company, is devoted to helping our clients safeguard their assets and prevent devastating losses. Reach out to us to discuss your needs to protect your business from malicious actors.
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