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The Economic Burden of Online Security
What is Online Security?
Online security, or cyber security, refers to the process of protecting individuals, firms, and internet devices from cyberattacks. It is also called computer security, digital security or IT security. It is involved in using different methods, technologies and processes to safeguard computers, networks, mobile devices, websites, online stores, and other web applications from cyber threats, which is becoming more common these days.
You might have used two-factor authentication for Facebook in order to add an extra layer of protection to your account from unauthorised access. It is cyber security measure. Similarly, the use of a temporary mobile number for OTP has become a popular method to ensure data privacy. Cyber threats and cyber-crimes are increasing day-by-day and so is the need to increase cybersecurity. In this article, we will explain the economic burden of online security.
Importance of Online Security
Online security is a global issue. The target of cyberspace criminals is to attack governments, corporations, and individuals around the globe. As the world grows and moves towards digitization, cybercrime activities become more frequent, and cybercrime costs are continuously increasing for companies and economies globally. According to a report, by 2025, the cost of cyber insecurity will reach $3.5 trillion of the world economy. The impacts of cybercrime are economic and financial difficulties, the loss of sensitive data and critical intellectual property, and the loss of revenue from international trade.
Cost of Cybercrime
Businesses and individuals need to take it more seriously as the cost of cybercrime is 0.8% of global GDP, or $600 billion a year, and compared to 2014, the reports indicate a 34% increase from $445 billion per year. There was an average annual growth rate of 11.3% until June 2017. According to the latest assessment on the economic impact of cybercrime by McAfee and the CSIS (Centre for Strategic and International Studies), it is seen that Europe suffers most due to cybercrime as compared to North America, as this cost for Europe is 0.84% of regional GDP and for North America is 0.79%, which is relatively low as compared to Europe.
Impacts of Cybercrime on the Global Economy
The following are some impacts of cybercrime on the global economy:
The Global Cost
The internet has become the main source of criminal conduct and over time, cybercrime is increasing. According to a report, almost half of all the crimes taking place in the United Kingdom are cyber-related because the internet provides easy access to both normal citizens and sinful players. According to Statista, cybercrime is predicted to cost more than $20 trillion to the global economy by 2026.
Ransomware
A fast-growing form of cybercrime is the use of ransomware, malicious software that blocks access to a computer until the ransom money is paid. It can affect individuals and business firms alike. These ransomware attack can be done for as little as $200 for individual victims. The ransom payments in the first quarter of the year 2016 were $209 million as compared to the year 2015, which was only $24 million worldwide.
Intellectual Property Theft
A major form of cybercrime is the theft of intellectual property and secret company information. Cybercrime is a multi-billion dollar industry, and theft occurs due to government interests, like military technology. When cyber criminals use military technology, the loss of intellectual property can affect the national security systems. Mostly, the affected businesses or individuals are unaware of this form of cyber threats because they still have access to their intellectual property.
Identity Theft
There is also identity theft related to the person using the internet. Many times, personal identity data is stolen by hackers and made available for sale on the dark web. According to the Bureau of Justice Statistics, it is reported that in 2012, 16.6 million people suffered from identity theft, which resulted in a loss of $25 billion globally.
Vulnerability of Cyber Insecurity
The following businesses or industries are vulnerable to cyber insecurity:
Financial Industry
The financial industry consists of banks and other financial institutions that store financial data and sensitive customer information on the internet, making them high-value targets for sinful players. People’s access to this financial data is expensive and can lead to severe financial losses and damage the reputation of companies. For example, a major loss of financial data by Capital One in 2019 affected 100 million of its customers and resulted in a $100 million fine from regulators. Security breach measures against cybercrime are critical for the financial industry to protect their financial data from data breaches by cybercriminals.
Energy Sector
Cybercriminals also target critical infrastructure. For example, they can attack the energy grid, which can cause widespread power cuts. This practice negatively impacts the country’s economy. A blackout happened in Ukraine in 2015, in which a cyberattack was on the energy grid.
Small Businesses
According to the data from a report by the National Cyber Security Alliance, almost 60% of small businesses leave their businesses within six months of a cyber-attack because they are unable to repair the damage to their business and reputation. Cyber security may not be a priority for small businesses, mainly due to lack of available funds. However, cyber security measures can protect their customers, employees, and profits from cyber-attacks.
The Internet of Things (IoT)
Cybercriminals can hack anything that is connected to the internet, from smart thermostats to highly defined medical devices, causing user security risks. A cyber-attack on Mirai Botnet in 2016 affected thousands of IoT devices and caused widespread disruption in online activities. The threat to IoT cyber security increases as the number of devices connected to the internet increases.
Ways to Improve Cyber Security
The following are some ways to improve cyber security and reduce the risk of cyber threats:
Security by Design
Security by design is a proactive approach of designing security measures in digital products and services in order to reduce security vulnerabilities. Security features are considered before the creation of products and are made part of the product design.
Data Fragmentation
The breakdown of large amounts of data into smaller and more manageable pieces is known as data fragmentation. These data fragments are stored at different locations. With the help of data fragmentation, hackers can only access a piece of data and they cannot hack the whole data.
Proxy Re-Encryption
The use of mathematical algorithms for the purpose of transforming encrypted data into different forms of data is known as proxy re-encryption. Using proxy re-encryption makes it difficult cybercriminals to access data.
Threat Intelligence
Threat intelligence is the collection of information about the possible security threats and using that information to improve cyber security. Businesses use the process of ethical hacking to track cyber vulnerabilities and protect themselves from cyber-crimes.
AI and ML
Artificial intelligence and machine learning are used to protect organisations from cyber insecurity by continuous monitoring of all information systems. The artificial intelligence tools provide 24/7/365 monitoring and protection from cyber threats at the same time. The artificial intelligence tools quickly respond to adverse threats and alert network administrators to act accordingly.
Decentralised Storage
In decentralised storage, the online data is stored on numerous devices which are at different geographical locations. This makes it impossible to hack all the devices at once. In centralised storage, data is kept in one place, such as a server or data center, which is vulnerable to hacks and cyber threats. In decentralised storage, the data is divided, encrypted, and stored, in parts, on millions of computers. Each computer stores a small piece of the overall data, making it virtually impossible for any cybercriminal to attack the whole data. This is done with the help of blockchain technology, which improves data security significantly.
Online Security and Economic Growth
The following points explain the contribution of online security industry in terms of economic growth:
Direct Investments
Making direct investments not only strengthens the company’s security infrastructure but also helps stimulating the growth of the cybersecurity industry. Companies like Apple, Google, Microsoft, and Amazon are those that make direct investments to strengthen the cybersecurity industry at global levels. By financing these companies, the demand for specialised software, hardware, and services increases, which in turn triggers other companies to develop precautionary measures.
Rise in Specialised Service Providers
In addition to Apply, Amazon, and Google, there are also many companies globally that provide specialised services to the cybersecurity industry. For example, companies like McAfee, Palo Alto Networks, and Symantec are those that become publicly traded with billions in market capitalisation.
Specialised Focus
The specialised focus is crucial in rapidly growing cybercrime activities. As tech giant companies like Microsoft offer multiple products and services, a totally new niche is introduced for companies at the global level to focus solely on cybersecurity. The specialised focus allows specialised service providers to provide flexibility and have the ability to quickly respond to cyber threats.
Economic Impact
Investing in the cybersecurity industry allows specialised companies to create a new economic sub-segment that not only provides jobs and generates income, but also enhances investments and promotes innovation. They also attract venture capital, which increases demand for these services.
Partnerships and Integration
These service providers can form partnerships with tech-related companies. For example, Microsoft has its own security measures, but it can also be the partner of another specialist company to enhance its security portfolio.
Training and Education
These specialised service providers also offer training and certifications in order to enhance the knowledge and skills of users in the cybersecurity industry. This practice indirectly helps enhance economy as it creates a well-educated and more skilled workforce in this industry.
Conclusion
In conclusion, online security or cyber security, is related to the protection of online data from cyber threats and attacks. These cyber threats are increasing day-by-day and are affecting the business firms and individuals alike. The use of cyber security measures by online businesses can not only, protect their stakeholders, but also contribute in terms of economic growth due to the rise of cyber security industry.
