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Business / Industries

Cost of cybercrime surging

By Cai Xiao (China Daily) Updated: 2014-11-27 07:41

PwC highlights 33% rise in average loss in Chinese mainland and HK

Financial losses caused by cybercrime have soared in China and across the world this year, caused mainly by a lack of security strategies by many companies, according to global accounting firm PricewaterhouseCoopers LLP.

The company said that the average annual financial loss resulting from cybersecurity incidents in the Chinese mainland and Hong Kong increased by 33 percent year-on-year in 2014 to $2.4 million, and that across the world rose 34 percent to $2.7 million.

The study was conducted in the second and third quarters of 2014 and was based on more than 9,700 responses worldwide, including 420 organizations from the Chinese mainland and Hong Kong.

Respondents included chief executive officers, chief financial officers and chief information security officers.

Large organizations (with gross annual revenues of $1 billion or more) detected 44 percent more incidents compared with last year, but at the other end of the scale, 20 percent of the respondents in the Chinese mainland and Hong Kong detected zero incidents or could not give a figure.

The total financial losses due to the theft of business secrets around the world were estimated between $749 billion and $2.2 trillion annually.

Samuel Sinn, PwC China's risk assurance partner, said that based on a simple calculation, using 4 percent as the Chinese respondents out of the total population of survey respondents, this could amount to a national amount of between $30 billion and $90 billion.

"While the survey confirms our concerns that the financial impact of detected security incidents is increasing rapidly, many more attacks are either going undetected or unreported," said Sinn.

"The actual value of stolen intellectual property or trade secrets is therefore likely to be much higher and could range in the tens of billions of dollars in the Chinese mainland and Hong Kong alone."

Simon Wu, a senior manager with PwC's cybersecurity service in China, said: "Higher information transparency of companies and more paperless offices could be reasons for the rapid increase of financial losses caused by cybersecurity incidents."

According to the survey, incidents attributed to insiders and third-party vendors rose while the actual security preparedness of companies fell.

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