10 Ways Cybercrime Impacts Business

Cybercrime is among the most significant threats to modern businesses—no matter the size of the company or its sector. With damage estimated at $10.5 trillion globally in 2025—enough to make it the world’s third-largest economy after the U.S. and China—cybercrime has become an unavoidable business risk that affects every organization with digital assets.

Here is a look at the most important ways cybercrime is affecting businesses today.

Key Takeaways

• Cybercrime and prevention are enormously expensive for just about any business today, including cybersecurity defenses, direct damage, legal fees, and compliance costs.
• Breaches erode customer trust, tarnish a company’s brand, and result in lost business.
• Companies must continually reevaluate and adapt their data storage and customer interaction policies to decrease their exposure to cyber threats.
• Attacks on one link in the supply chain can ripple through and disrupt multiple businesses.
• Cybersecurity insurance has become more expensive and harder to secure as incidents rise.

1. Direct Financial Losses

From Fortune 500 companies to small businesses, from traditional manufacturers to leading-edge tech firms, no enterprise is immune to these threats. Meanwhile, the average cost of a data breach reached $4.88 million in 2024, about a 20% jump since 2020.

These costs are the best-known outcome of cyberattacks, which derive from the following:

The Immediate Costs

These can include the following:

• Ransomware payments, which are predicted to cost more than $265 billion annually by 2031
• Emergency IT services and cybersecurity consultants
• Legal fees and potential fines
• Customer notification and credit monitoring

Operational Costs

• System downtime and productivity losses
• Revenue losses during system outages
• Emergency hardware or software purchases
• Cost of recovering or rebuilding compromised data and systems

Long-Term Financial Effects

• Increased insurance premiums
• Investment in enhanced security measures
• Staff training and security awareness programs
• Ongoing monitoring and compliance costs

Real-world examples highlight how quickly major bills come due for those targeted by cybercriminals. In 2023, MGM Resorts International (MGM) reported that a September cyberattack caused a $100 million hit to its third-quarter results. The company then spent another $10 million on consulting, legal, and other fees related to the incident.

Cybercriminals aren’t only targeting for-profit firms: London hospitals had to cancel over 800 planned operations and transfusions, as well as 700 outpatient appointments, in June 2024 because of a ransomware attack targeting their blood-test analysis system. In addition, universities across the world have been targeted, with some forced fully offline for weeks.

2. While Attacks Are Getting Quicker, the Effects Are Far Wider

Modern cyberattacks move with stunning speed. In 2023, the average time it took cybercriminals to move laterally within a network (known as “breakout time”) decreased by about a third. Thus, businesses often won’t have the time to react and contain threats before a significant attack is in place.

While the time attackers need is shrinking, their reach is expanding. Major incidents illustrate the broad effects of these attacks:

• A 2024 cyberattack on the medical payment processor Change Healthcare, which one expert called the “biggest ever cybersecurity attack on the American healthcare system,” prevented healthcare practices nationwide from receiving payments for weeks.
• A June 2024 attack on CDK Global, which provides software to thousands of car dealerships in the U.S. and Canada, affected about 15,000 dealerships, causing many to go without payments and stopping them from moving inventory off their lots.

Often, the initial numbers seem small but grow quickly:

• A 2023 breach in the systems of the ancestry tracking firm 23andMe Holding Co. (ME) originally appeared to affect only 0.1% of customers (14,000 individuals) but ultimately impacted 9 million users through access to ancestry information.
• Cloud-storage company Snowflake reported in June 2024 that 165 customers were compromised by credential theft, with just one incident exposing 560 million Ticketmaster customer records.

Note

In 2024, security experts were reporting that the number of records breached each month by hackers equaled the total number breached in all of 2023.

 3. Data Theft and Privacy Breaches

Hackers focus on stealing sensitive information that can be monetized or used for further attacks. However, the consequences of data breaches go beyond the immediate theft, impacting regulatory compliance, customer trust, and operational continuity.

Businesses are shifting resources to focus on data encryption, multi-factor authentication, and regular audits to safeguard their systems.

“Credential Theft”

Among the most-used means of hacking systems is credential theft, the unauthorized use of someone’s login information, such as usernames, passwords, or security tokens, typically to gain access to sensitive systems, accounts, or data.

4. Reputational Damage

The reputational impact of cybersecurity incidents can outlast all other consequences, affecting an organization’s relationships with customers, partners, and investors.

This includes its stock price. Research by the U.K.-based research firm Comparitech found that companies with data breaches typically saw the following:

• An immediate 3.5% drop in stock price following news of the breach
• Continued underperformance against the Nasdaq by 3.5%
• Long-term effects on their market reputation and investor confidence

The erosion of customer trust can also be significant. According to research by IBM, loss of customer trust accounted for nearly 40% of the cost of breaches. This comes from customer churn, marketing needs, and other efforts to rebuild trust after such incidents.

While all industries are affected by cyberattacks, they don’t all face the same hits to their reputation and stock price. Researchers at Comparitech found that healthcare companies had the steepest decline in share prices, lagging the Nasdaq by 10.6% in the six months after disclosure of a breach. It was followed by the finance sector (6.4% underperformance) and manufacturing (4.0%).

Long-Term Reputational Effects

The impact on a company’s reputation can be extensive over time:

• Greater difficulty acquiring new customers
• Challenges in maintaining business partnerships
• Increased scrutiny from regulators and industry watchdogs
• Higher costs for insurance and financial services
• Ongoing media and public relations challenges

5. Increased Security Costs

The investment required to prevent and respond to cyber threats represents a significant and growing business expense. Organizations face mounting pressure to strengthen their security posture through various investments.

Spike in Security Budgets

• Global cybersecurity spending is projected to total more than $1.75 trillion between 2021 and 2025.

Ongoing Operational Costs

• Staff training and security awareness programs
• Continual monitoring and threat detection
• Regular security assessments and penetration testing
• Compliance maintenance and documentation
• Higher insurance premiums

6. Supply Chain Vulnerabilities

Modern businesses depend on interconnected digital supply chains, making them susceptible to cascading risks if one link is compromised. Supply chain attacks are surging, with breaches often originating through third-party vendors. High-profile incidents, such as the SolarWinds hack, underscored how vulnerabilities in software supply chains can expose thousands of downstream companies.

Businesses are increasingly investing in third-party risk management and supply chain security measures to mitigate these growing threats.

7. Cloud Security Challenges

Cloud-based systems, essential for modern business operations, are facing unprecedented threats. In 2023, cloud-related cyber intrusions increased by 75%, largely because of systems, unpatched vulnerabilities, and the exploitation of shared environments.

To combat these risks, organizations are prioritizing investments in cloud-specific security measures, such as encryption, identity management, and multi-factor authentication.

8. Regulatory and Legal Consequences

The regulatory landscape for cybersecurity continues to evolve, creating additional compliance burdens and potential legal exposure for businesses. Here are just some of them:

• U.S. Securities and Exchange Commission: New rules require prompt disclosure of significant cybersecurity incidents to shareholders.
• EU Digital Operations Resilience Act (DORA): Enforces robust risk management practices across the financial sector.
• Global data protection laws: Extended reporting requirements, including the General Data Protection Regulation in the EU and state privacy laws in California and other U.S. states.
• Industry-specific mandates: Sectors like healthcare (HIPAA) and finance (PCI-DSS) face specific compliance directives.

Legal Exposure

The legal consequences of a breach can be severe, including not just direct legal costs but also the following:

• Personal liability: Chief information security officers are increasingly facing personal accountability for lapses in security.
• Class action lawsuits: Victims of data breaches often file suit for damages and negligence.
• Regulatory fines and penalties: Non-compliance with cybersecurity laws can lead to large financial penalties.

Note

A study by PwC found that only 15% of executives say their companies are measuring the financial impact of cyber risks to a “significant extent.”

9. Operational Changes

Cybersecurity concerns are fundamentally reshaping how businesses operate and approach digital information. At the technical level, organizations are implementing “zero-trust” security systems, moving to a model where no user or system is automatically trusted. This requires putting in place better controls over identity and access management across all systems and ensuring that users have only the minimum necessary access for their jobs.

Regular security audits and assessments have become routine operations rather than occasional checkpoints, forcing businesses to constantly assess and adjust their security posture. Companies have also had to dramatically modify their data collection and storage practices, putting in place stricter controls over what information they gather and retain.

10. Broader Business Culture Shifts

These technical changes have brought about broader cultural shifts within the business world. Security is no longer relegated to IT departments but has become a central part of many companies’ business strategy, discussed in boardrooms alongside financial and operational concerns. Employee security awareness training has evolved from annual compliance exercises to ongoing education programs that adapt to emerging threats.

Perhaps most significantly, businesses have had to reassess their relationships with vendors and partners. Security considerations now play a central role in selecting and managing vendors. This new reality isn’t going away: Cybersecurity is not just a technical requirement but a fundamental aspect of modern business operations.

How Do Cybercriminals Choose Their Targets?

Cybercriminals often choose their targets based on opportunity and perceived vulnerabilities. High-profile organizations, such as those in finance, healthcare, and retail, are attractive because of the sensitive data they hold and the potential for financial gain. Increasingly, attackers are also exploiting third-party vendors and supply chain partners to gain access to larger, more secure organizations.

How Quickly Can a Cyber Attack Take Place?

Modern cyberattacks can move with remarkable speed. In 2023, the average “breakout time” (time for attackers to move laterally within a network) was just 62 minutes, with the fastest recorded attack taking only 2 minutes and 7 seconds. For businesses, this means the window for detecting and responding to threats is extremely narrow.

Are There Particular Vulnerabilities Small and Medium-Sized Businesses Have?

Small businesses are especially vulnerable for these reasons:

• Limited resources for cybersecurity investment
• Fewer dedicated IT security personnel
• Weaker security systems
• Often seen as easier targets by criminals

The Bottom Line

Cybercrime represents a fundamental risk that affects businesses of all sizes in every industry. With global cybercrime costs estimated at $10.5 trillion in 2025, the impact extends far beyond immediate financial losses to encompass operational disruption, reputational damage, and long-term business viability. Organizations must approach cybersecurity as a core business function rather than just an IT concern.

To protect against these threats, businesses are working to implement comprehensive security measures, maintain robust incident response plans, regularly train employees on security awareness, ensure adequate insurance coverage, and stay current with evolving threats and newer regulations.