A study commissioned by Microsoft revealed that the potential economic loss in the Philippines due to cybersecurity incidents can hit a staggering $3.5 billion. This is 1.1 percent of the country’s total GDP of $305 billion.
The Frost & Sullivan study, titled ?Understanding the Cybersecurity Threat Landscape in Asia Pacific: Securing the Modern Enterprise in a Digital World?, sought to provide business and IT decision makers with insights on the economic cost of cybersecurity breaches in the region and identify the gaps in organizations? cybersecurity strategies.
The study involved a survey of 1,300 business and IT decision makers ranging from mid-sized organizations (250 to 499 employees) to large-sized organizations ( more than 500 employees).
The study revealed that more than half of the organizations surveyed in the Philippines have either experienced a cybersecurity incident (18%) or are not sure if they had one as they have not performed proper forensics or data breach assessment (34%).
?As companies embrace the opportunities presented by cloud and mobile computing to connect with customers and optimize operations, they take on new risks,? said Hans Bayaborda, managing director of Microsoft Philippines.
?With traditional IT boundaries disappearing the adversaries now have many new targets to attack. Companies face the risk of significant financial loss, damage to customer satisfaction, and market reputation ? as has been made all too clear by recent high-profile breaches.?
The study revealed that:
? A large-sized organization in the Philippines can possibly incur an economic loss of $7.5 million, more than 200 times higher than the average economic loss for a mid-sized organization ($35,000); and
? Cybersecurity attacks have resulted in job losses across different functions in seven in ten (72%) organizations that have experienced an incident over the last 12 months.
To calculate the cost of cybercrime, Frost & Sullivan created an economic loss model based on macro-economic data and insights shared by the survey respondents. This model factors in three kinds of losses which could be incurred due to a cybersecurity breach:
Direct: Financial losses associated with a cybersecurity incident – this includes loss of productivity, fines, remediation cost, etc;
Indirect: The opportunity cost to the organization such as customer churn due to reputation loss; and
Induced: The impact of cyber breach to the broader ecosystem and economy, such as the decrease in consumer and enterprise spending.
?Although the direct losses from cybersecurity breaches are most visible, they are but just the tip of the iceberg,? said Edison Yu, vice president and Asia Pacific head of enterprise for Frost & Sullivan. ?There are many other hidden losses that we have to consider from both the indirect and induced perspectives, and the economic loss for organizations suffering from cybersecurity attacks can be often underestimated.?
In addition to financial losses, cybersecurity incidents are also undermining the Philippines organizations? ability to capture future opportunities in today?s digital economy, with more than half (57%) respondents stating that their enterprise has put off digital transformation efforts due to the fear of cyber-risks.
Key threats, gaps
Although high-profile cyberattacks, such as ransomware, have been garnering a lot of attention from enterprises, the study found that for organizations in the Philippines that have encountered cybersecurity incidents, data exfiltration, and data corruption are the biggest concern as they have the highest impact with the slowest recovery time.
?The ever-changing threat environment is challenging, but there are ways to be more effective using the right blend of modern technology, strategy, and expertise,? added Hans. ?Microsoft is empowering businesses in the Philippines to take advantage of digital transformation by enabling them to embrace the technology that?s available to them, securely through its secure platform of products and services, combined with unique intelligence and broad industry partnerships.?
The study also revealed that more than almost four in five (79%) organizations in the Philippines have either adopted or are looking to adopt an AI approach towards boosting cybersecurity.
AI?s ability to rapidly analyze and respond to unprecedented quantities of data is becoming indispensable in a world where cyberattacks? frequency, scale, and sophistication continue to increase.