Why Global Firms Are Increasing Investments Amid Growing Cyber Threats

The increasing frequency and severity of cyber incidents have prompted global businesses to rethink their cybersecurity strategies. According to the latest IT Security Economics report by Kaspersky, companies worldwide are planning to boost their IT security budgets by as much as 9% in response to the growing cyber threat landscape. This reflects a significant shift, with businesses recognizing the urgency of strengthening their defenses.

The Kaspersky IT Security Economics report, an annual survey of IT and cybersecurity professionals across 27 countries, highlights the pressures organizations face in securing their digital infrastructure. Large enterprises have reported a median cybersecurity budget of $5.7 million, with an overall IT budget of $41.8 million. Small and medium-sized businesses (SMBs), on the other hand, allocate a smaller amount—$0.2 million from an IT budget of $1.6 million.

The Financial Impact of Cybersecurity Breaches

One of the most striking findings of the report is the gap between what companies allocate for cybersecurity and what they actually spend to recover from cyber incidents. Large enterprises reported experiencing an average of 12 cyber incidents this year, incurring costs of $6.2 million to recover, a figure that is 1.1 times higher than their entire cybersecurity budget. This highlights a growing disparity between the resources allocated for prevention and the cost of dealing with breaches when they occur.

For SMBs, the situation is even more concerning. On average, SMBs experienced 16 incidents in the past year, spending $0.3 million on remediation—1.5 times more than their allocated IT security budget. This makes SMBs the most financially impacted group in relation to their cybersecurity investments, underscoring the critical need for more comprehensive security planning in smaller organizations.

Key Drivers Behind the Budget Increase

Several factors are contributing to the upward trend in cybersecurity spending:

1. Increasing Complexity of Cybersecurity Threats: As cybercriminals employ more sophisticated tactics, organizations must invest in advanced technologies and talent to stay ahead of emerging threats.
2. Growing Regulatory Pressures: Governments are increasingly focusing on digital sovereignty, which leads to new regulations requiring businesses to adhere to stricter data protection and cybersecurity standards. This regulatory shift adds additional costs for businesses as they strive to comply with evolving legal requirements.
3. Rising Salary Expectations for Cybersecurity Professionals: With a shortage of skilled cybersecurity professionals, organizations are finding it more expensive to recruit and retain top talent. Salaries in the cybersecurity field continue to rise, adding to the financial pressures on businesses.

Cybersecurity During the Festive Season: A Rising Risk

As businesses prepare for the holiday season, many may be relaxing their cybersecurity posture, assuming that threat actors will also take time off. However, this assumption could be disastrous. Cybercriminals, particularly ransomware attackers, often exploit periods of reduced staff, such as public holidays or weekends, to launch their attacks. In fact, research has shown that ransomware attacks increase by 30% during public holidays, taking advantage of organizations that are understaffed or operating with reduced resources.

Several high-profile cyberattacks have occurred during festive periods, including the Colonial Pipeline attack in May 2021 and the JBS Foods breach over the Memorial Day weekend. These incidents caused widespread disruption and financial losses, highlighting the need for constant vigilance.

The Shift in Ransomware Tactics

Interestingly, while the rate of ransom payments has declined in recent years, threat actors are continuously adapting their tactics. A study revealed that only 36% of ransomware victims opted to pay the ransom in Q2 2024, down from around 80% five years ago. As businesses grow more resilient, cybercriminals are becoming more creative, launching attacks when they are most likely to catch their victims unprepared.

Mitigating Risks During the Festive Period

With cybercrime becoming a year-round threat, companies need to ensure they have contingency plans in place to respond to cyberattacks, even during the holiday season. Some key strategies to mitigate risk include:

1. Continuous Risk-Based Patching: Ensuring systems are up to date and protected before the holiday break can significantly reduce vulnerabilities.
2. Penetration Testing: Regular testing of systems to uncover weaknesses and address them before they can be exploited.
3. Multi-Factor Authentication (MFA): Enforcing MFA for all critical systems to prevent unauthorized access from phishing attacks or stolen credentials.
4. Data Encryption: Encrypting sensitive data ensures that even if attackers gain access, they cannot use the information.
5. Incident Response Plans: Having a clear, documented response plan in place so that employees can act swiftly in the event of a breach.
6. Training and Awareness: Regularly training employees to recognize phishing attempts and follow secure remote work practices is essential for maintaining security.

The Bottom Line is “Cybersecurity is an Ongoing Investment“

The findings of the Kaspersky report underscore the need for businesses to increase their investment in cybersecurity, not only to meet the growing threat of cyberattacks but also to ensure that they can respond effectively when incidents occur. The rising financial and operational impact of cyber incidents is driving businesses to allocate more resources to prevent and mitigate cyber threats.

As cybercriminals continuously evolve their tactics, companies must adapt by investing in the right tools, talent, and strategies to stay secure. The holidays, while a time for rest, should serve as a reminder to businesses that cybersecurity is a 24/7, year-round responsibility.

By strengthening cybersecurity measures, businesses can reduce the risk of costly breaches and ensure that they are ready to face any challenges that arise, regardless of the time of year.