How cybercrime impacts businesses and how to fight back

Did you know that cybercrime is projected to cost the world $10.5 trillion annually by 2025? Internet scams and fraud have become a massive and persistent threat, costing us trillions of dollars annually and leaving no organization, big or small, completely safe.

While some cybercriminals are out for financial gain, others are driven by motives like disrupting operations or stealing sensitive data. Either way, the consequences for businesses can be devastating, ranging from financial losses to damaged reputations and legal troubles.

So, what do you need to know about cybercrime? We’ll break down what it is, how it impacts businesses and what you can do to protect your organization.

What is cybercrime?

At its core, cybercrime refers to illegal activities carried out using computers, networks or the internet. What does this look like in action? Here are some of the most common types of cybercrime that businesses face:

• Social engineering attacks: With a focus on taking advantage of human psychology through technical tools, social engineering attacks often have scammers impersonate loved ones, friends, coworkers or executives to manipulate people into sharing confidential data or performing certain actions. For instance, an internet scam might involve someone posing as a company’s CEO to gain access to company systems.
• Phishing: A type of social engineering attack, phishing uses fraudulent messages sent via email, text or instant message to infect the victim’s system with malware or trick them into revealing sensitive information.
• Ransomware attack: This involves criminals using malicious software to lock victims out of their own systems until a ransom is paid. According to a 2020 Hiscox study, 6 percent of companies reported having paid a ransom to regain control of their systems, resulting in $381 million in losses.

These examples of cybercrime are just the tip of the iceberg. As technology advances, so too will approaches to internet scams and fraud. Still, understanding these basic types of cybercrimes is an important first step in protecting your business from an attack.

How cybercrime impacts businesses

Cyber incidents and data breaches are rarely ever just a minor inconvenience—they can have long-lasting and devastating effects on businesses of all sizes. Let’s take a look at some of the most significant ways cybercrime impacts businesses.

Financial losses

One of the most immediate and obvious impacts of cybercrime is the cost. Whether it’s paying a ransom, attempting to recover stolen funds, losing revenue due to downtime or dealing with legal and auditing costs, businesses often suffer major losses because of cybercrimes.

According to IBM, the global average cost of a data breach in 2024 hit a record $4.88 million—10 percent more than the year before. That’s a massive hit, especially for small and medium-sized businesses that might not have the financial cushion to absorb it.

Operational disruption

Cyberattacks can bring business operations to a halt. Ransomware attacks, for example, lock out critical systems or data, forcing businesses to virtually come to a standstill until they can resolve the issue. This downtime costs money, slows productivity and leads to customer dissatisfaction.

Reputation damage and customer confidence

Once a company falls victim to cybercrime, it’s not just the bottom line that suffers. Customer trust takes a hit, too. A security breach can shake a company’s reputation and cause customers to lose confidence.

Consider the lingering public relations damage suffered by major companies after breaches. For instance, Equifax—a credit bureau—experienced a data breach compromising the data of 147 million people in 2017, which led to a class action suit in 2019, a court order in 2020, a $425 million settlement in 2022, and a Federal Trade Commission announcement of additional payments in 2024. That’s seven years of bad news caused by one data breach.

Ultimately, once trust is broken, it’s hard to rebuild. Not only can this lead to customer churn, but it could also make future customers hesitant to engage with the company, harming long-term business results. As researchers at Comparitech found, companies that disclosed breaches in 2020 or later saw their share prices underperform the NASDAQ by an average of -6.6% in the six months after the disclosure.

Legal and regulatory consequences

Depending on the nature of the breach, businesses could also face legal action and costly fines, especially if they’re found negligent in protecting customer data. Regulations like the General Data Protection Regulation (GDPR) in Europe, California Consumer Privacy Act (CCPA) and the Health Insurance Portability and Accountability Act (HIPAA) require businesses to take certain steps to safeguard information, and failing to comply can result in penalties.

At the end of the day, cybercrime doesn’t just harm businesses in one way—it can create a domino effect that touches everything from day-to-day operations to finances to customer trust. That’s why proactive cybersecurity measures are essential for long-term business success.

What can businesses do to protect themselves from internet fraud and scams?

Now that we’ve talked about the risks and impact of cybercrime, let’s focus on the good news: There’s plenty businesses can do to protect themselves. Cybersecurity might seem daunting but taking a few key steps can make a huge difference in minimizing the risk of an attack.

Secure business communications

One of the easiest and most effective ways to protect your business is to secure your business communications. Whether it’s emails, file-sharing, instant messaging or phone calls, using secure channels can prevent hackers from intercepting sensitive information. You should also make sure your team is using strong passwords and multi-factor authentication to add an extra layer of security.

To create complex passwords, string numbers, text and characters together to form a passphrase that that’s easy for you to remember, but difficult for criminals to guess. For example, let a past vacation inspire you: 23HikeInBryce-Gr8!. Avoid using the same password or passphrase for multiple sites in case your credentials are ever compromised.

Train your employees

The vast majority of cyberattacks rely on human error, so make sure your employees know the signs of phishing emails, suspicious links and other red flags before they cause damage. Regular training sessions will help everyone understand the latest internet scams and how to avoid them. Also give employees an internal email or secure point person so they know how to report a cybercrime or suspicious activity. The more aware your employees are, the less likely they are to fall victim to an attack.

Invest in cybersecurity tools and infrastructure

Strong cybersecurity infrastructure goes beyond simply installing security software. Firewalls, intrusion detection systems, antivirus software and encryption tools are essential, but they need to be part of a comprehensive effort that’s woven into a company’s processes and structures.

According to a 2023 study, large firms that used more security precautions—18 out of the 20 studied controls, compared to just 13—lowered their likelihood of a cyber incident from 81 percent to 58 percent. Even more, companies with robust cybersecurity policies—including having a dedicated chief information security officer—can restore their stock prices in just seven days, while those with weaker practices take an average of 90 days.

Develop a response plan

Even with the best precautions, cyberattacks can still happen. That’s why it’s important to have a clear cyber fraud reporting and response plan in place. Know exactly what steps to take if your business is targeted. This includes identifying and reporting the cybercrime, alerting stakeholders and bringing in cybercrime investigation experts to help minimize the damage.

Audit regularly

Cyber threats are always evolving and so should your defense strategy. Regular security audits will help you identify any weaknesses in your systems and address them before cybercriminals can take advantage. Make sure your software and systems are up to date and be proactive about patching any vulnerabilities.By putting these measures in place, you can significantly reduce your risk of falling victim to cybercrime. While there’s no such thing as perfect security, taking these steps will help you build a strong defense and keep your business safer.

Staying ahead of cybercrime

Cybercrime is a serious and evolving threat—but it’s not something businesses have to sit back and accept. By understanding the risks, knowing the types of attacks out there and taking proactive steps to protect your organization, you can significantly reduce the chances of falling victim to cybercriminals.