An upsurge in cyber attacks will continue to put pressure on European businesses and expose them to the threat of a critical information infrastructure breach, a report by a Belgian think-tank said on Monday.
The most serious threat to the financial health of European companies is the high cost of attacks against their computer systems, the report said.
Victims of such attacks can run up costs exceeding those incurred by other business failures. The scale of cyber attacks is also increasing, it said.
“Economic victims have to spend money they don’t have, and this has a direct impact on their ability to raise and invest capital,” it said.
The report, commissioned by the Flemish International Institute for Applied Security, was based on analysis of more than 1,200 cyber incidents reported to European data protection watchdogs from 2009-2012.
The cost of business damage from cyber attacks was identified as the main threat to EU companies, surpassing, for example, the impact of natural disasters, theft of data, and reputational damage.
A violation of information security regulations, including regulations to hold on to personal data, is particularly costly.
Another major cost, especially for small and medium-sized companies, is the delay in getting value from assets that have been suffered in the event of a breach.
The report said 50 percent of IT managers regarded information security regulation as critical, significantly higher than in other parts of the world.
Although 99 percent of executives worldwide said they felt personal data should be stored securely, they said the system had the potential to become less secure.
Just 14 percent of CEOs regard the future of the Internet as secure.
The first physical explosions from the damages caused by cyber attacks were reported to have occurred in 2008, as business links were being established between Estonia and Russia, following a dispute between Moscow and Tallinn over the status of two Soviet-era breakaway regions.
In 2008 attacks by hackers on Estonia’s government, banks and telecoms networks were found to have been orchestrated by Russia, though there is no evidence to support this theory.
Cyber attacks that attack business data collected and distributed from Europe and the United States could become destabilising as they have the potential to gather data from Europe and the United States on the internal market of Russia and Russia’s energy imports to the European Union.
“If Russian hackers can now collect data from European companies in such a way, then they could in theory blackmail European companies or politicians into shutting down their operations to meet the demands of those hackers,” the report said.
Andrea Miteski, PhD and MD in the field of reinsurance. Long term senior insurance executive with specialization of reinsurance optimization.