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February 13, 2016

Global Cost of Cybercrimes Is More than $400 Billion, Report Estimates

It can be tough to fully assess the costs of cybercrime, but the Center for Strategic and International Studies and McAfee have taken a shot.

Their new report estimates that cybercrimes are a $400 billion drag on victims, but the range could be between $375 billion to $575 billion in losses, depending on how the numbers are crunched. The report also notes that most cybercrimes go unreported and that any dollar figure is based on incomplete data.

“The most important loss from cybercrime is in the theft of IP and business confidential information, as this has the most significant economic implications,” the report states.

The continents that saw the greatest loses were North America, Europe and Asia, while Africa experienced the least loss, according to the report, which notes that this is unsurprising.

Income levels are a good predictor of cybercrime, as wealthier countries (or firms) are more likely to be targets—it takes roughly the same amount of work to hack rich and poor targets, but rich targets produce a better return on effort.

What can be done to reduce the loss from cybercrime? The report points to “better technology and stronger defenses,” use of standards and best practices, and international agreement on “law enforcement and on state behavior that included restraints on crime” as potential solutions:

Making progress on these changes will require governments to do a better job accounting for loss and companies to do a better job assessing risk. These are well within the realm of the possible if people decide to treat cybercrime seriously and take action against it.

Without action, though, the report sees two possible scenarios:

In the first, the cost of crime for developed countries would stay largely flat, at least as a percentage of GDP, but the global cost would increase as new entrants and developing countries accelerate their use of the Internet. In the second, the cost to developed economies would increase as even more activities move online and as hackers improve their ability to monetize what they can steal.

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