Sunday 24 September 2017

Warning cyber attacks can cost shareholders billions

Hackers can damage a firm's brand and its share price
Hackers can damage a firm's brand and its share price

Helen Reid

Cyber security breaches erode companies' share prices permanently, with financials the worst hit, a study issued by IT consultant CGI and Oxford Economics has found.

Severe cyber-security breaches, such as those having legal or regulatory consequences, involve the loss of hundreds of thousands of records and hurt the firm's brand.

They caused share prices to fall on average 1.8pc on a permanent basis, the analysis of 65 companies affected since 2013 globally has found.

Investors in a typical FTSE 100 firm would be worse off by an average of €140m after such a breach, the report said.

Overall the cost to shareholders of these 65 companies would be almost €50bn.

CGI's analysis compared each company's share price against a cohort of similar companies to isolate the impact of cyber breaches from other market movements, during incidents detailed in a breach index compiled by Dutch security firm Gemalto.

Two-thirds of companies had their share price adversely impacted after suffering a cyber breach.

Financial firms were the worst affected, followed closely by communications firms.

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