How cybercrime affects your profits.

Over the years, the computation of intellectual property has been hard to evaluate. However, some ways of determining the value will comprise estimating the worth of it on the market or determining the capability of such property and correctly evaluating it value on the market.

Other relevant means maybe computation of value of inputs into the said product. Evident is this quote from the Economic impact of cybercrime and cyber espionage. “The international Maritime Bureau estimated the annual cost of piracy as somewhere between 1billion US dollars and 16billionin 2005. To put these figures in context, the annual value of maritime trade in 2005 was $7.8 trillion, which means piracy cost equalled at most 0.02% of the total.”

Cybercrime, what the heck is that?

Cybercrime, has the prefix cyber which means internet or an activity relating to internet. Hence by derivation it basically means activities over the internet that are considered as criminal. Espionage on the other hand denotes spying. Someone may as well ask how spying cab be illegal and therefore criminal. For a simple and brute answer, I would say invading the privacy of an individual or groups is illegal in most countries and violates their fundamental human rights to privacy. But of course, there are some countries that disregard this and spy on its citizens with the excuse of protecting them.

How does it occur?

Just as criminal activity occurs in any human setting or community, the internet cannot be an exception. It can occur in a number of ways. Some of which may include

1.      Extortion gimmicks; individuals hack into website sand demand ransom. They threaten the owners or companies involved to extort money from them to carry out other insidious activities, some countries regard some these issues as terrorism especially when it involves powerful countries.

2.      Deny relevant services; some of these people who engage in cybercrime do what they do best to simply stage a protest. As happened in Estonia 2007. Imagine the loss of revenue that will clamp down online retail businesses should their services be denied to their customers by unwarranted third parties.

3.      Stealing financial information or customers or proprietary property. These individuals engage in these activities to filch financial information for numerous purposes which mostly include business confidential information such as trade secrets and private intellectual properties. In extreme cases, sensitive business negotiations data or even insider stock trading information are accessed.

This palpably is the most evil form of hacking which invariably harms financial markets, enables individuals or groups of individuals to manipulate stock prices or automated trading systems, peddle false information that disturbs the market price.

4.      Installation of virus for monitoring and damage; most of us are fond of downloading so many things that we are not exactly sure of its security implications. Hackers being sneaky for their own nefarious dealings explore this vulnerability. We download things that later turns out to be virus. Then it infiltrates our files and monitors the activities that goes on. Most often, they not only monitor you and your company but manipulate data, and eventually damages them.

How does this affect my business?

The implications of these activities are numerous and varied. Among them are the following. We all know that in competitive market, consumers are good at searching for the best lowest price with great satisfaction. Therefore if a company incurs so much in protecting itself from such criminal activities. These cost would be passed on to the consumers and that would in turn affect their gains due to competitions. That is not to say that companies must not make an effort to protect itself.

Loss of sales; In December 2010, PayPal was attacked and lost huge sum of revenue when customers decided not to transact any business with them because they believed that by continuing to engage in business activity activity with a firm that had being involved in a cyber-attack will equally make them (the customers) vulnerable.

Damage of reputation; when PayPal was attacked, its customers deserted it not because they had changed their mode of delivery of service but because it reputation had been tarnished. The trust the customers had had being broken and that took them a long time and considerable effort coupled with huge cost to build it. The respect the brand commanded at the time was disregarded and I believe no company would want to fall prey to this canker. One can imagine the high cost of repair that would be needed here.

Loss of financial assets or intellectual property and business confidential information

Supposed a company is attacked, the consequence are mostly huge and disheartening. Among them maybe its financial assets or intellectual property that it hopes to bring to the market in the near future. Confidential information of customers could be exposed and they would be susceptible to these hackers as well. Information from Bloomberg.com specifically by Keith Collins indicates the information that was taken when numerous cooperate institutions were hacked. Below are the firms and their various information.

ü  Premera Blue Cross. Announced: 03/18/2015. The company, which discovered the breach in January, says hackers may have accessed Social Security numbers, bank accounts and medical information. Private company, N/A .11Million records

ü  Anthem (Announced: 02/05/2015) Sources familiar with the investigation tell Bloomberg News that the details of this attack include “fingerprints” of a nation-state, and that China is the main suspect. Stock fell 1.1% 80Million records such as Social Security numbers, Email addresses and Physical addresses

ü  Sony Announced: 11/25/2014. Hackers broke into its network and exposed employment and salary records, documents and embarrassing private emails between Hollywood executives. Stock fell 1.1% 47,000 records such as Proprietary information and Employee details

ü  Home Depot Announced: 09/02/2014 The Company said 56 million payment cards had been stolen, and later disclosed 53 million e-mail addresses had also been pilfered. Stock fell 2.4% 109Million records such as Credit card numbers and email addresses.

ü  JPMorgan Announced: 08/27/2014 .The biggest U.S. bank said a data breach affected 76 million households and 7 million small businesses. Stock fell 0.7% 83Milion records such as Email addresses and Physical addresses

ü  EBay Announced: 05/21/2014 in a massive attack, hackers took customers’ personal information, affecting up to 145 million active users. Stock fell 0.7% 145Milion records including Email addresses, Physical addresses and Login credentials

ü  Target Announced: 12/13/2013 though announced at the end of 2013, the effects of this breach carried into 2014. Target said its U.S. sales were "meaningfully weaker" after the data theft was disclosed. Stock fell 0.3% 110Milion records including Credit card numbers.

These are just but few victims. There could also be high cost of effective security, and sometimes creation of competition from people who lay their hands on proprietary information or intellectual property.

The world is moving towards the age of information and technology, everything happens by the touch of a screen or click of a button. The level of privacy continues to decline at amazingly rapid rate. Hence just beware.