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How much does cybersecurity cost and how to budget for it?

We are in a new world of the remote workforce and emerging technologies; most business data is now stored online, making cybersecurity a must-have for all companies.

With regular news of cyberattacks on businesses of all sizes, small businesses are starting to wonder about the risks they face and whether they’re doing enough to protect their companies.

As with many core business functions, cybersecurity often requires a monetary investment and needs space on the budget. The need for cybersecurity isn’t going away any time soon; it’s becoming more relevant for all businesses. That’s why it’s important to consider cybersecurity as a business, financial and practical priority in 2022.

What is cybersecurity?

Cybersecurity protects computer systems and networks from information disclosure, theft of or damage to their hardware, software or electronic data.

Many think that cybersecurity is one single product or technology that keeps your data safe from cyber threats. This is not the reality.

A robust cybersecurity framework requires a layered approach that safeguards your organisation with technologies, people and processes.

10 most common cyber threats

Cyber threats are like viruses, and cybersecurity is the vaccine. To eliminate the security risks, you must implement the appropriate cybersecurity technology.

In other words, you must know the different types of cyber-attacks to come up with the best solutions. Below are the 10 most common cyber threats:

  • Malware: “Malicious Software” refers to any programme or file that can harm the user or the hardware. Examples of malware include Trojans, viruses, spyware etc.
  • Ransomware: A type of malicious software that locks your data, and a ransom is demanded in the form of cryptocurrency to unlock the file; it often comes in emails.
  • Data breach: Cybercrime where business data or information is leaked to the dark web or sold to hackers.
  • Phishing: Emails that contain links and attachments infected with malware or ransomware to steal data such as login credentials or banking details.
  • DNS hijacking: Domain Name Server hijacking redirects your trusted clients to a malicious website or their server
  • Crypto-jacking: Cybercriminals take over your servers and network to theirs for cryptocurrency, which costs business money in lost resources.
  • Insider threats: Internal risks in which employees abuse access to the data and information on company networks.
  • Denial of service attacks: Network and servers are overloaded by fraudulent network traffic to bring your website or business offline, and you cannot service clients.
  • Identity theft: One tries to obtain a company’s financial information or personal information and use this data to make unauthorised transactions.
  • Property theft is also known as intellectual property theft; this cyber threat involves getting access to ideas or creative expressions from individuals or companies without their permission.

Also Read: Better cyber safe than sorry: Don’t wait till you’re hacked

Many small businesses neglect their security procedures mainly because they think it will cost them a lot. However, the consequences of falling victim to a cyber-attack can be detrimental to your brand and reputation and result in financial loss.

5 factors in determining cybersecurity costs

To ensure that your organisation is secure, balance the threat with the business’s risk appetite and your skillset in-house before considering the appropriate technical controls or deciding what external resources are needed to help support you.

The costs will differ according to numerous factors:

  • Industry

The number of online security breaches is rising across all industries, and some verticals are more vulnerable to these attacks. Financial institutions, construction firms, healthcare providers, eCommerce and IT companies are the fields that experience the most malicious behaviour.

Companies within the industries are more susceptible because operations involve sensitive information to provide financial gain to an attacker.

  • Company size

Attackers can use employees and the company networks as the entry point to access sensitive data, more employees, more possible opportunities for successful phishing attacks and business email compromise.

  • Data types

Businesses that collect more sensitive data will need additional security layers to comply with industry-standard legal compliance.

For example, for medical providers who keep patients’ medical reports or businesses that store customers’ credit card information, the more sensitive the data is, the higher the cybersecurity expenses.

  • Utilised hardware and software technologies

The hardware and software your operations use determine the kind of security measure that you have in place. After all, safeguarding your company’s server is different from protecting your website. Your current setup plays a role in determining the amount you should allot for cybersecurity costs.

  • On-premises deployment vs Security-as-a-Service (SECaaS)

The traditional on-premise deployment is often very costly. You need to purchase servers or appliances with databases, software and licences, and let’s not forget the necessary facility and utility to ensure the on-premise infrastructure is working well.

Also Read: There is a concerning lack of cybersecurity talent. Here’s how to tackle it

SECaaS is a subscription model in which you just need to pay a flat fee based on the unit price, depending on the service you subscribed to, with no other hidden installation or service cost.

For example, in Email Security Protection as-a-services, you just need to pay a “flat fee per user”, including the technology’s licence. You can choose based on a monthly or annual subscription basis.

How to determine your company’s cybersecurity budget?

Companies’ spending on cybersecurity is often tied to their IT budget; your account needs to fit into your business size and risk evaluation.

Industry leaders like IBM feel that a healthy cybersecurity budget should make up 9 per cent to 14 per cent of the overall IT department’s annual budget. In reality, the estimates of what companies currently pay to vary, ranging from 5.6 per cent to 20 per cent of the company’s total IT spend.

According to Forbes, spending on cloud security is predicted to increase by 33 per cent, becoming a US$585 million-dollar market, and data security will grow by 7.2 per cent.

Big enterprises are doing all to avoid cyber threats, but smaller businesses aren’t far behind. This isn’t a surprise since remote working has left us all exposed.

People are much easier targets when out of the office, so it’s only logical to increase cybersecurity budgets to avoid being targeted.

Speaking in real numbers: if your 50-employee company has an IT budget of US$30,000 annually, you should plan to use at least US$3,000 for security. Your cybersecurity provider can often help you identify the highest priority and lowest cost solutions to tackle with your limited budget.

You can tailor your cybersecurity programme and slowly grow your budget in the coming years to provide enhanced protection and help mitigate risks.

Final thoughts

Cybersecurity is no longer a “nice to have” but a “need to have” for all businesses. No business can predict when or how they will get a cyber threat, but they can fortify vulnerable systems in advance. A cyber-attack can make or break a company, depending on how prepared they are.

A comprehensive cybersecurity programme doesn’t have to cost a lot of money, but it does require prioritisation and commitment: Cybersecurity is an investment, not a liability.

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