Global cybercrime is costing the global economy $600bn a year, according to a report released this week. The massive bill, equivalent to almost 1% of global GDP, is steeply up on the estimate from 2014. Nation states are leading actors in illicit online activity, the research finds, with Russia, North Korea and Iran leading the pack of state-sanctioned criminals.
The global report, Economic Impact of Cybercrime – No Slowing Down, released by cybersecurity giant McAfee, in partnership with the Center for Strategic and International Studies (CSIS), focuses on the significant impact that cybercrime has on economies worldwide. The report concludes that cybercrime costs businesses close to $600 billion, or 0.8 percent of global GDP, which is up from a 2014 study that put global losses at about $445 billion.
The report attributes the growth over three years to cybercriminals quickly adopting new technologies, the ease of engaging in cybercrime – including an expanding number of cybercrime centres – and the growing financial sophistication of top-tier cybercriminals.
“The digital world has transformed almost every aspect of our lives, including risk and crime, so that crime is more efficient, less risky, more profitable, and has never been easier to execute,” said Steve Grobman, Chief Technology Officer for McAfee. “Consider the use of ransomware, where criminals can outsource much of their work to skilled contractors. Ransomware-as-a-service cloud providers efficiently scale attacks to target millions of systems, and attacks are automated to require minimal human involvement. Add to these factors cryptocurrencies that ease rapid monetization, while minimizing the risk of arrest, and you must sadly conclude that the $600 billion cybercrime figure reflects the extent to which our technological accomplishments have transformed the criminal economy as dramatically as they have every other portion of our economy.”
Banks remain the favourite target of cybercriminals, and nation states are the most dangerous source of cybercrime, the report finds. Russia, North Korea and Iran are the most active in hacking financial institutions, while China is the most active in cyber espionage.
“Our research bore out the fact that Russia is the leader in cybercrime, reflecting the skill of its hacker community and its disdain for western law enforcement,” said James Lewis, senior vice president at CSIS. “North Korea is second in line, as the nation uses cryptocurrency theft to help fund its regime, and we’re now seeing an expanding number of cybercrime centres, including not only North Korea but also Brazil, India and Vietnam.”
The report measures cybercrime in North America, Europe and Central Asia, East Asia and the Pacific, South Asia, Latin America and the Caribbean, Sub-Saharan Africa, and the Middle East and North Africa. Not surprisingly, cybercrime losses are greater in richer countries. However, the countries with the greatest losses (as a percentage of national income) are mid-tier nations that are digitized but not yet fully capable in cybersecurity.
Calling for more progress to be made on implementing the Budapest Convention, a treaty about cybercrime, the report’s authors make a series of recommendations for talking the growing problem of cyber-attacks. The proposed solutions include adopting universal standards for defensive technologies, improved co-operation by law enforcement and those co-ordinating security requirements, and perhaps most importantly international pressure on states that act as safe havens for cybercriminals. One thing is clear from the findings, left unchecked cybercriminals will pose an ever bigger threat to the world’s economic stability.