TalkTalk offer an excellent case study in how a cyber attack - and particularly how it's responded to - eventually finds its way to the bottom line.
While their Chief Executive's hapless response to the crisis will enter the pages of textbooks as a reference point in poor public relations management, the £42m it's cost TalkTalk to date to put right the leaking of 157,000 customer's data highlights the very real costs involved post-breach.
While shareholders lick their wounds, with profits for the year halved, Dido Harding, TalkTalk's Chief Executive, revealed the company is likely to incur further costs in patching it's cyber security:-
“We take security incredibly seriously; we thought we took it very seriously before. We have brought forward spending on security.”
In discussion with companies we still find budget for cyber security improvements only become available after a breach. Too many companies still feel they're not a legitimate target.
The TalkTalk example highlights a) the importance of media training for your senior execs, and b) how proper cyber security can save money in the longer term, as the real world costs of a breach are often exponentially more expensive, and felt for a very long time afterwards.
TalkTalk profits more than halved following a cyber-attack in which the personal details of thousands of customers were hacked. The telecoms company was hit with £42m in costs when almost 157,000 customers were affected by the attack in October last year. Almost one in 10 of those customers had their bank account numbers and sort codes accessed. Pre-tax profit fell to £14m in the year to 31 March, from £32m a year earlier. The share price was up just over 1% at 274p on Thursday afternoon. TalkTalk insisted it “recovered strongly” in the fourth quarter following the attack, after losing 95,000 customers in the third quarter as a direct result of the hacking.