January 04, 2024
Financial impact of security breaches is highest in SA
Cyber security is an ever-changing industry where threats often evolve faster than companies can implement systems to keep hackers out. According to a recent report, the number of cyber attacks on businesses in South Africa, Kenya and Zambia increased by 76% in 2023. The financial implications of these breaches are the highest in South Africa.
The biggest threat to South African businesses is illegal access to company and/or client information. In other words, data breaches and hacks remain the most prominent cyber security threats to local enterprises.
The report also revealed that 67% of SA companies used advanced endpoint protection such as firewalls, HIPS and malware. Half of local enterprises use two-factor authentication and 46% use secure VPN and remote access. Generally, cyber security awareness is high in SA but the costs of attacks are greater than in other African countries.
Investing in solid cyber security tools and software is less expensive than fixing breaches. The average cost of a cyber security breach is around R49 million, which is an 8% increase from 2022. Hackers are becoming more adept with their techniques and technology, while businesses are becoming more reliant on digital systems.
Security breach statistics
The most common method of attack used by cyber criminals targeting companies is email phishing (61%), followed by attacks through compromised passwords (48%) and data breaches (44%). Furthermore, 61% of the companies included in the study said the breaches occurred as a result of remote or hybrid working. Just under half of all South Africans polled said they still use the remote working model to conduct business.
Local companies claim to have implemented more cyber security controls, however, hackers are still successfully gaining access to valuable data and sensitive information. The financial impact of these cyber security breaches remains the highest for South Africa.
Cyber threats are evolving faster than many of the security systems, so companies cannot afford to relax. Enterprises need to remain vigilant and update their cyber security systems as often as possible.
The costs of cyber security breaches
Businesses bear significant financial costs as a result of security breaches. The direct costs of remediation can be exorbitant, including forensic investigations, system repairs and legal fees. Furthermore, noncompliance with data protection regulations can result in significant fines.
The financial impact of security breaches, however, goes beyond these direct costs. Customer trust can be severely impacted, which causes reputational damage, lost business and revenue. Rebuilding a tarnished brand image frequently requires significant marketing and public relations investments. Furthermore, businesses may be required to compensate affected customers, which adds to the financial strain.
How to mitigate this financial impact
Proactive security measures need to be taken in order to minimise the financial damage caused by security breaches. Firstly, companies need to invest in appropriate cyber security tools. Implement strong security measures such as firewalls, intrusion prevention systems and data encryption. Update and patch software on a regular basis to address vulnerabilities.
Next, employee education needs to take place on a regular basis. Hold regular training sessions to educate employees about cyber security risks and precautions. This aids in the prevention of incidents caused by human error, such as falling victim to phishing attacks.
Companies also need to make an incident response strategy. Create a comprehensive incident response plan that outlines what steps to take in the event of a breach. Assign key personnel roles and responsibilities to ensure a coordinated response to the breach while minimising financial damage.
Security audits should also be performed on a regular basis to identify and address vulnerabilities. Use industry-standard frameworks and, if necessary, consult with outside experts. In addition, all sensitive customer data should be encrypted, as this adds an extra layer of security, even if the systems are breached.
Finally, consider purchasing cyber insurance coverage to provide financial protection in the event of a breach. This can assist in covering the costs of legal fees, investigations and potential liabilities.
Security breaches have far-reaching financial consequences for South African companies. The direct costs of remediation, as well as the indirect costs, can be substantial. Businesses can reduce the risks and financial impact of security breaches by prioritising cyber security measures and implementing best practices.
Working with a reliable and reputable cyber security services provider is a great place to start. SEACOM offers a suite of cyber security tools for enterprises in South Africa and our experts are well-equipped to set up and manage these services.
South African businesses can not only protect themselves from threats but also ensure the long-term sustainability and growth of their organisations by taking a proactive approach to cyber security and working alongside a security provider. For more information about our cyber security services or to get a quote, email us at marketing@seacom.com or leave us a message.
SEACOM owns Africa’s most extensive network of information and communications technology (ICT) infrastructure, including subsea cables and secure internet connections. We offer a diverse range of flexible, scalable and high-quality solutions for businesses that meet world-class standards for connectivity.
SEACOM is privately owned and operated, making it agile and adaptable to the needs of the customer. This makes us the preferred ICT and internet connectivity partner for African businesses and peripheral service providers. We can guarantee high-speed, low-latency and secure internet connections to corporates and small enterprises.
For more information on our internet and voice solutions, follow us on LinkedIn, Facebook or Twitter. Keep an eye on our news section for insightful articles and relevant news stories on African ICT, internet connectivity and our leading cloud and security solutions.