A research report from HP and the Ponemon Institute was released that focused on cybercrime and the costs it incurs. In our briefing with Varun Kohli, Director of Product Marketing in the Enterprise Security Products division at HP and Dr. Larry Ponemon, founder of the Ponemon Institute, the epidemic and creeping financial impact of cybercrime was the center of conversation. HP sponsored the study by the Ponemon Institute and the findings in the report  “2012 Cost of Cyber Crime Study” indicate that the frequency of cybercrime and costs have risen for a third straight year, with a nearly 40 percent increase for financial impact alone.

The financial impact of cybercrimes is pretty staggering. For the U.S. the cost associated with a cybercrime is $8.9 million. That figure has risen 6 percent over the average cost reported one year ago and 38 percent over two years ago. There is also an upward trend in cyberattack incidents, reported this year at 102 successful attacks per week. That figure is up from 72 attacks per week one year ago and 50 attacks two years ago. On a positive note, the report finds that in certain technology fields, technology and governance has provided some remedy in number of successful cyberattack incidents and costs.

“Organizations are spending increasing amounts of time, money and energy responding to cyberattacks at levels that will soon become unsustainable,” said Michael Callahan, vice president, Worldwide Product and Solution Marketing, Enterprise Security Products, HP. “There is clear evidence to show that the deployment of advanced security intelligence solutions helps to substantially reduce the cost, frequency and impact of these attacks.”

Still while outside attacks certainly present a certain classic security scenario, there is much confirmation that things are evolving. There is growing indication that inside threats are becoming a very real issue.

Recent news of a “spearphishing” attack at the White House comes to mind as an example of the kind of simple, yet directed social engineering attack that combines with technology to create such significant breaches.  Specifically, Dr. Kohli looks at the consumerization of IT as a very significant security matter. Things like BYOD and Cloud mobility are changing and even erasing the classic enterprise perimeter. The prescription for these scenarios must focus on three basic elements:

1. Build it in – Security must be implemented at every level.
2. No Silo’s – Make it intelligent and attract all business units possible to the security conversation.
3. Protect what matters – That should be self-explanatory but touches on fundamental security principle – Identify what the most sensitive information is and identify where it is at any given time.

The most costly cybercrimes continue to be those caused by malicious code, denial of service, stolen or hijacked devices, and malevolent insiders. When combined, these account for more than 78 percent of annual cybercrime costs per organization. Additional key findings include:

• Information theft and business disruption continue to represent the highest external costs. On an annual basis, information theft accounts for 44 percent of total external costs, up 4 percent from 2011. Disruption to business or lost productivity accounted for 30 percent of external costs, up 1 percent from 2011.
• Deploying advanced security intelligence solutions can mitigate the impact of cyberattacks. Organizations that deployed security information and event management (SIEM) solutions realized a cost savings of nearly $1.6 million per year. As a result, these organizations experienced a substantially lower cost of recovery, detection and containment than organizations that had not deployed SIEM solutions.
• Cyberattacks can be costly if not resolved quickly. The average time to resolve a cyberattack is 24 days, but it can take up to 50 days according to this year’s study. The average cost incurred during this 24-day period was $591,780, representing a 42 percent increase over last year’s estimated average cost of $415,748 during an 18-day average resolution period.
• Recovery and detection remain the most costly internal activities associated with cybercrime. On an annual basis, these activities account for almost half of the total internal cost, with operating expenses and labor representing the majority of the total.

“The purpose of this benchmark research is to quantify the economic impact of cyberattacks and observe cost trends over time,” said Dr. Larry Ponemon, chairman and founder, Ponemon Institute. “We believe a better understanding of the cost of cybercrime will assist organizations in determining the appropriate amount of investment and resources needed to prevent or mitigate the devastating consequences of an attack.”