July 2018
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Cybercrime accounts for up to $1 trillion in global losses

ICTpost News Network

According to a report by McAfee, global cyber activity is costing up to $500 billion each year, which is almost as much as the estimated cost of drug trafficking.

The report’s authors say that estimating the annual costs of cyberattacks is extremely difficult because some companies hide their losses, while others don’t even know the value of what has been stolen from them.

In the report, the authors look at losses in six categories: the loss of intellectual property, cybercrime, loss of business information, service disruptions, the cost of securing networks, and reputational damage to a hacked company.

“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,” the report reads.

In 2009, McAfee released a report that said data theft and breaches from cybercrime were costing businesses as much as $1 trillion globally in lost intellectual property and expenditures for repairing the damage. While the global figure from McAfee’s report still states $1 trillion, it is tampered by the $300 billion low-end figure.

Hackers have also set their sights on financial exchanges, targeting NYSE Euronext (NYX) New York Stock Exchange and Nasdaq OMX Group (NDAQ).

The CSIS report estimates global cyber activity costs between $100 billion and $500 billion each year, compared with $600 billion in costs associated with drug trafficking and $1 billion to $16 billion in costs tied to piracy..

Cyber crime also has a real impact on employment, which remains painfully low after the worst economic crisis since the Great Depression.

McAfee’s report is a preliminary analysis for a larger study that looks even deeper into the costs of hacking and cybercrime.

“Cybercrime and cyber espionage cost the global economy billions of dollars every year. The dollar amount, large as it is likely to be, may not fully reflect the damage to the global economy,” the report reads. “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.”