Article provided by King Price Insurance
Depending on whose numbers you believe, cybercrime will cost the global economy anything between $1 trillion and $6 trillion this year alone.
Bringing it close to home, TransUnion’s latest global fraud report shows that digital fraud attempts against the financial services industry in South Africa rose 187% between the last four months of 2020 and the first four months of 2021. That’s 187% in eight months. And it’s not going to get better any time soon.
The cost of a cyberattack can literally put a small to mid-sized company out of business. The IBM 2019 Cost of a Data Study suggests that R43.3 million is the average total cost of a data breach in South Africa, with R2,200 being the per capita cost per lost or stolen record. Globally, an Inc.com study suggests that 60% of small businesses close their doors within 6 months of an attack.
The scary thing is that most SMEs in South Africa are totally unprepared for an attack. One survey suggests that 56% of companies don’t have a plan to either prevent or respond to a cyber-incident.
Adding an extra layer of complexity is South Africa’s Protection of Personal Information Act (POPIA), which took effect on 1 July. While most regulated sectors, including insurers, have always secured their clients’ personal info, the kicker is that, now, if a leak occurs, companies have to publicly disclose it immediately, and take steps to rectify the situation.
If they don’t, the risks just keep piling up. If your business is hacked, and you didn’t have the correct procedures and safeguards in place, you could get fined by the Regulator. On top of that, any people who incurred damages as a result of the breach could take legal action against the company for damages. And we’re not even getting to the issue of reputational damage yet. Don’t get caught off guard. Work closely with a reputable IT security company to make sure your firewalls and other electronic protections are up to date. And have insurance in case you do get hacked. It’s the biggest risk facing businesses right now.