When people think about cybercrime, they often imagine losing sensitive data. They also think about damaged files and being locked out of their IT systems. While the direct threats of data theft and ransomware attacks are well known, an often-overlooked effect of cybercrime is less clear: reputational loss.
Cybersecurity breaches not only pose a significant threat to a company's financial health, but also to its reputation. In today's digital age, customers expect business partners to protect their sensitive information from cybercriminals as their own reputation can be severely damaged by a cyberattack. A security breach can therefore lead to loss of customer trust, bad publicity, and long-term brand damage.
In this blog, we will explore five ways that cyberattacks can harm a company's reputation. We will also discuss why it is important to elevate your cybersecurity strategy with SCION.
Loss of customer trust
A successful cyberattack exposes a company's failure to protect its customers' sensitive data, leading to a significant loss of trust. IBM Security found that the average cost of a data breach in 2024 amounted to USD 4.88 million for affected businesses. The cost for lost business and post-breach activities alone accounted for USD 2.8 million on average.
Negative media coverage
Major cyberattacks can often get a lot of media attention. This is especially true if it involves well-known organizations or affects many customers. This negative publicity can further erode public trust in the company and its ability to protect sensitive information.
A devastating example can be found in the 2024 Change Healthcare data breach. In February 2024, the U.S.’ biggest health care payment system was targeted in an elaborate ransomware attack that left the critical system down for nearly a month. The attackers stole data from about 100 million people and used ransomware to lock files.
The company estimates nearly USD 2.9 billion of total losses due to the cyberattack. However, the cost of their reputational damage might be even more severe.
The story gained international media attention and was covered by major news outlets. The American Hospital Association indicated that the breach was the most impactful incident to date against the U.S. health care system.
Impact on stock prices and financial loss
Cyberattacks can also have a direct impact on a company's stock price. Companies that have experienced a data breach often see their stock price drop. This can last for several years compared to the overall market.
Additionally, the financial losses from a cyberattack can be substantial, including costs for data recovery, legal fees, and compensation for affected customers.
Cyberattacks can have a lasting effect on the confidence of shareholders. In 2023, Harvard Business Review reported that publicly traded companies experienced a 7.5% drop in their stock values and an average loss of USD 5.4 billion in market cap after a cyber breach. On average, it took these companies 46 days to recover their stock prices to levels before the breach.
Loss of business opportunities
Following a cyberattack, a company's reputation may suffer to the point where potential business partners or investors become hesitant to engage in new ventures. This reluctance can lead to missed opportunities for growth and collaboration, ultimately hampering the company's long-term success.
Employee morale and recruitment
A cyberattack can also affect employee morale, as staff may feel that their employer failed to adequately protect their personal information or the organization's critical assets. Additionally, the negative publicity surrounding a cyberattack can make it challenging to attract top talent, as potential job candidates may be wary of joining a company with a tarnished reputation.
How to reduce the impact of cybercrime on businesses with SCION
Because of its openness and relatively low running cost, many businesses conduct most of their digital communication and operations on the Internet today. It is therefore vital for companies to tackle the security challenges that come with the Internet. Companies are especially vulnerable to ransomware and DDoS attacks, with data breaches and service disruptions being some of the biggest consequences.
By its very nature, any service or data on the Internet is potentially visible to anyone. Thus, the attack surface on today’s Internet is massive. SCION, an Internet protocol developed at ETH Zurich, is a new technology that fills the security and reliability gaps that can be found in today’s Internet while keeping its advantages.
By implementing our SCION-based solutions, your company can reduce the attack surface of your network significantly (up to 99%!) and therefore prevent intrusion and DDoS attacks. We offer two deployment configurations on the SCION Internet with different benefits.
Use case 1: Closed network made of trust domains
Ideal for site-to-site communication between branches or partners
When you need to secure your data exchange between sites or your company and third-party suppliers, the EDGE-to-EDGE configuration is a perfect fit.
The EDGE-to-EDGE setup securely connects your headquarters or main office to other branches or partner locations on the SCION Internet. Data is routed securely between locations, and in case of a disruption, your services will still be available for business continuity, thanks to redundant ISP connectivity.
By leveraging the Anapaya EDGE on the SCION Internet, you can enhance data integrity, confidentiality, and ensure secure communication. This setup minimizes the risk of DDoS attacks, intrusion attempts, and ransomware, reducing the chance of data breaches.
Use case 2: Secure network for remote access
Ideal for securing web services, business services, and IoT services
If you have a service on the Internet that needs to be accessed by remote users or devices, Anapaya GATE is the right solution is for you. With your service securely protected on the SCION Internet, you can control visibility and select via which ISPs your service is accessible. As an operator of critical services, you have fine-grained control over where your service is visible on public networks.
With Anapaya GATE, you get to choose who can see your services, which greatly reduces the load on your security infrastructure. And, as we know, what cannot be seen, cannot be attacked. Therefore, you can effectively reduce the attack surface and prevent DDoS and intrusion attacks for uninterrupted operations and higher data security.
Conclusion
In today's digital landscape, a company's reputation is closely tied to its ability to protect sensitive information from cyberattacks and the ability to offer a service always on.
Choosing our SCION-based solutions is a step toward building a resilient cybersecurity framework, enabling your business to maintain customer trust, avoid negative publicity, and minimize potential reputational damage that can result from a cyberattack.
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