We might start with definitions, the simplest one is any crime involving a computer or network. Yet most organizations do not differentiate well between IT and cyber security. Also important is the difference between vulnerability and a threat. While there are endless, persistent threats to your enterprise, that is not the same as your vulnerabilities. An unsecured database is your vulnerability. A hacker stealing your data is the threat.

How big is cybercrime? About $388 billion, according to the recent Norton CyberCrime Study. That is almost as big as the $411 billion global drug trade. According to PriceWaterhouseCoopers, which regularly studies this issue, cybercrime is now the second most common fraud reported, after asset misappropriation.

“Security” by its definition is to invest money so that something doesn’t happen, thus making it impossible to prove a negative. Yet the magnitude of cybercrime’s definitions, risks and potential costs are exponentially higher. The risk to brand alone is impossible to measure. Some organizations have avoided negative brand equity (for example, the University of Southern California and TJ Maxx), while others have taken a big hit (Sony and Heartland). While the 2011 Unisys Global Security Index survey found that 79 percent of respondents would stop doing business with an organization that compromised their personal data, it is not clear that is true. Students are neither dropping out of USC, nor are customers fleeing TJ Maxx stores. And the cost to Sony’s business (not reputation) that was initially estimated as high as $24 billion and later revised down to $6.096 billion, actually came to $171 million A lot of money, but not the level of doom predicted. Actually, the Japan earthquake cost Sony more – about $270 million.  

Some companies have begun to report cybercrimes, as ATT did during a recent attack on its customer accounts that netted $2 million for an alleged terrorist group called Jemaah Islamiyah. Yet, many companies do not report cybercrimes to avoid negative brand exposure. “One of the reasons we do not know the scale of this is that organizations are embarrassed to reveal the impact,” BT chairman Sir Michael Rake said in a speech at the recent EastWest Spell Institute Conference.

Indeed, 2011 has been named “a year of unprecedented Cyber Crime” by the 2011 Unisys Global Security Index. And a recent Booz Hamilton report notes that financial institutions are highly targeted (Sutton’s Law) and face a highly motivated adversary. While electronic banking, social media and mobile devices are obvious threats, increased C-suite targeting may not be. “Senior executives are no longer invisible online. Firms should assume that hackers already have a complete profile of their executive suite and the junior staff members who have access to them,” the report states. And the NSA has started assisting US banks with intelligence about foreign hackers due to the fear of financial sabotage.

All is not lost in the war against cybercrime, though. The Verizon Data Breach Study identified that most victims simply did not have their eye on the ball, even at the lowest level of cyber security:

•  83% of victims were targets of opportunity

•  92% of attacks were not highly difficult

•  76% of all data was compromised from services

•  86% of breaches were discovered by a third party

•  96% of breaches were avoidable through simple or intermediate controls

•  89% of victims subject to PCI-DSS had not achieved
compliance.

To have a fighting chance, the C-suite must identify how it will be resilient against cybercrime and who will lead the process. Ownership is lacking as different organizations perceive it as either an IT or a security problem, when in fact it is a business problem. And corporate security will be negatively impacted if it has no voice in strategy. With cyber security documented at such a weak level, it is no wonder cybercrime is the fastest growing industry in the world. Cyber security’s economic boom cannot be far behind.