Online crime hits Irish economy for €630 million a year

Cybercrime is costing the Irish economy more than €600 million a year, a new study has claimed.

However, the estimated figure of €630 million could be far lower than the true impact of the attacks, with companies often reluctant to report the breaches due to fears of damage to their reputations.

The research, which was carried out by Grant Thornton’s new cybersecurity practice, found that the number of data breaches in Ireland was on the rise, with notifications rising 36 per cent in 2012.

The cost of such incidences includes direct losses incurred by the company, costs associated with beefing up security and indirect losses from loss of customer goodwill.

A number of incidences have hit the headlines in recent months in Ireland, the most significant of which was the Loyaltybuild data breach. The incident, which saw the personal details of more than 1.5 million people across Europe compromised in what the Ennis-based company described as "a sophisticated criminal act", affected about 90,000 Irish customers with firms such as Supervalu, Axa, ESB, Pigsback and Clerys. LoyaltyBuild invested €500,000 in new security systems after the attack, and only reopened for business last month.

However, Grant Thornton said this was just the "tip of the iceberg"

Common incidences in Ireland cover everything from identity fraud and online scams to cyber theft and cyber extortion.

"Cybersecurity is a growing problem for Irish companies and imposes significant financial costs. Our estimate of €630 million is likely to be below the actual level given that many companies still do not report security breaches for fear of the reputational damage it can cause," said Grant Thornton's Mike Harris.

“The ability of the business to detect and react to the attack will be the key factor in limiting the impact. The loss of confidence in a company due to a cybersecurity incident can be devastating, particularly where customer information is lost or client funds compromised.”