Steve King, Chief Security Officer, Netswitch, Inc.

Did you know that cybercrime cost the global economy about $490 billion in 2014, and that the impact to corporations resulting just from the theft of intellectual property alone is estimated $170 billion? This doesn’t include any of the losses to individuals from hacking, nor does it reflect the value of credit card or personal information stolen from these hacks.

The fact that cybercrime has become a growth industry should not come as a surprise. It has seriously damaged trade, competitiveness and innovation across industries and throughout the world. It acts like a surcharge or a tax on innovation and because of extensive containment and prevention measures, cybercrime slows the pace of global innovation while reducing the rate of return to investors. It is a lose-lose as well, because the lowered rate is not a zero sum game. The lost return opportunity does not flow back to the hackers or subsequently into the economy.

Its impact on both the economy and employment (job growth) is substantial, and if cybercrime continues to track at the current pace, its threat is potentially catastrophic.

So far this year alone, more than 160 million people in the United States, or 70% of the adult population, have had personal information (including credit and debit card numbers, PINs, Account information, passwords, etc.) stolen by hackers, while over 37 high-profile global breaches affected almost 100 million people from Europe, South America, to Asia and the Middle East.

Forensics have led to the arrest and capture of a handful of these criminals, but the growth far outstrips the enforcement, capture and arrest. The better the security software gets, and the more people move toward protecting their businesses, the faster the hackers learn how to work around the barriers.

The recent hack at Home Depot illustrates the point: the malware was a variant of the APT, BlackPOS that attacked Target Stores earlier, and still, Home Depot’s intrusion prevention software didn’t recognize it or jump start efforts at remediation.

It is time for every business, large or small to get serious about network and data security. If we don’t step it up and begin to protect our customer information from cybercriminals, the Federal Government will step in and do it for us. Conservative estimates placed the increase in cost of compliance for SOX at $600 billion globally, and increased the cost of business operations by 13%. I can only imagine what the cost of compliance for Federal Security Regulations might be, but I’m pretty sure it won’t be just 13%.

About the Author

As a co-founder of the Cambridge Systems Group, Steve King led the marketing effort for ACF2, which would become the leading Enterprise Data Security product for IBM mainframe computers. As a direct result, Steve is now known as the God-father of Information Security. Over the years, Steve has been issued multiple engineering patents encompassing contextual semantic search technologies, web-enabled multimedia audio transfers, imaging capture and database smart query processing.