Cyber attacks may cost Malaysia US$12.2 bil in economic losses

Cybersecurity attacks can also result in job losses.

KUALA LUMPUR: Malaysia faces the possibility of incurring US$12.2 billion (about RM49 billion) in economic losses, which is 4% of its Gross Domestic Product (GDP) of US$296 billion, due to cybersecurity incidents.

Based on a study by Microsoft and US consulting firm Frost & Sullivan, a large organisation in the country could incur losses of US$22.8 million, 630 times higher than an average company.

“Cybersecurity attacks have resulted in job losses across different functions in three out of five organisations that have experienced cyber incidents over the last 12 months,” Saipan Agarwal, Frost & Sullivan Asia Pacific Marketing vice-president said here today.

He explained that the loss was calculated on a model based on macroeconomic data and insights shared by survey respondents.

The losses could be in the form of direct financial losses while indirect losses may be in the form of reputation loss as a result of opportunity cost to the organisations and induced cost arising from the impact of cyber breaches across the ecosystem and economy.

“Although direct losses from cybersecurity breaches are the most visible, it is just the tip of the iceberg,” he said.

Microsoft Malaysia national technology officer Dzaharudin Mansur said cybersecurity incidents would undermine organisations’ ability to capture future opportunities in the digital era.

“The world of digital economy is moving very fast. The threats are real and it is getting more and more dangerous by the day.

“Those that rely on internet connectivity, such as smart cities, autonomous vehicles and the power industry, could be affected if proper measures are not taken,” he said.

The weakest link that could cause a cyber threat in an environment was the humans themselves, Dzaharudin said.

“We get emails all the time that ask us to click on a link to get something for free – money, for example. Half of us click it in the first hour. This itself has opened the doors to hackers to infiltrate our system, hence causing a bigger problem,” he said.

Meanwhile, CyberSecurity Malaysia chief executive officer Amirudin Abdul Wahab said that as the country geared up for the digital era, the risks would get higher.

“The broader the internet connectivity and digitalisation, the easier it is for everyone to be targeted. We need to be ready to face this and find ways to lower the risks,” he said.