With all the media interest in cybercrimes and online security breaches during the past few years, you might get the idea that identity theft and internet security crimes are virtually the only types of criminal activity most businesses are facing today.
But you’d be very, very wrong.
Recent reports show crime is on an upswing in Australia, and many businesses are seeing a similar surge in burglaries, thefts, vandalism, assault and other crimes that can take a major toll on their profitability and productivity.
While an average IT breach can certainly be costly — research shows a single breach can cost an average of $8 million for companies worldwide — “physical” security breaches and incidents like theft, burglary, vandalism, and assault also come with a hefty price tag that extends far beyond direct and immediate losses like property damage or losses from theft.
Security Incidents and Business Losses
The economic impact of property crime and other “physical” security incidents can be devastating for many businesses:
- Employee theft, shoplifting, and fraud contribute to about $2.7 billion in losses to Australian businesses, according to a report from the Global Retail Theft Monitor
- A single vandalism incident costs businesses about $3,400 USD per year ($4,400 AU), according to statistics from the U.S. Small Business Administration
- Data from the Australian Institute of Criminology indicates the cost of business vehicle theft is nearly $300 million per year
For personal crimes like assault or rape, losses can be even more substantial, and the long-term impact on a business’s reputation and revenue can be devastating.
According to one survey of universities, a single sexual assault incident can result in losses of up to $2 million, with an average of about $350,000 per incident, just for legal costs and damages paid to the plaintiffs. That doesn’t take into account the significant cost a business suffers to its reputation — a cost that can translate directly into lost revenue — not just for a few weeks or months, but for years to come.
Reputational costs are one of the many “hidden” costs associated with security incidents, and unlike physical damage and repairs, the costs of reputational losses can be much more difficult to assess and quantify.
For most businesses, it takes years to build up trust among their clientele, and the value of that trust can’t be underestimated. Rebuilding trust can take years — sometimes, complete restoration is never achieved; and a “black mark” stays with the company and the brand, resulting in lost customers and lost revenue that simply can’t be recovered.
In addition to attenuation of your customer base, rebuilding your company’s reputation typically involves hiring additional staff to improve your public relations or diverting existing marketing staff from their normal promotional duties. For some businesses, reputational losses can be so extreme, they can eventually lead to closure or bankruptcy filings.
Productivity and Other "Time-Related" Losses
Reputational damages are some of the most potentially devastating losses associated with security incidents, but they’re not the only hidden costs.
While somewhat easier to measure through the impact on your bottom line, productivity losses can also be substantial and difficult to predict. Not only can a security incident disrupt your business, it can also take a toll on your employees’ morale, and it can even make it difficult to attract top talent in the future, which means you can suffer a truly long-term impact to your bottom line.
Another cost that can be difficult to anticipate is an increase in your insurance premiums. Insurance is a risk-based business. And when your business experiences a crime or security incident, your insurance company will weigh that risk when determining your future premiums. In some instances, you may even find that your coverage is completely dropped, leaving you scrambling for a new vendor.
Then of course, there are the time costs associated with meeting with attorneys, public relations staff, insurance agents, and community representatives — not to mention the time devoted to working with the media to disseminate information and help mitigate reputational losses whenever possible.
These time costs can be especially difficult to gauge since the impact of a security incident can persist for months or years.
The Solution: Be Proactive
You’ve probably heard the expression “An ounce of prevention is worth a pound of cure.” When it comes to security incidents, it’s especially good advice.
Most large businesses use banks of security monitors attached to carefully placed cameras — but surveying all those monitors is difficult, even with an experienced staff. The good news: AI-assisted video monitoring can make the task of monitoring a lot simpler by analysing images in real-time, as they’re captured, identifying aberrant behaviours and unusual activity that’s more likely to be associated with criminal activity.
These systems make it easier for businesses and their security staff to more effectively monitor activity and to respond proactively to stop incidents before they escalate.
The iCetana dynamic live-monitoring system is a leading example of AI-assisted video-monitoring technology designed to help businesses assess and respond in real-time, enabling security teams to take action that can halt crime and prevent security issues in their earliest stages — and sometimes even before they begin.
iCetana is scalable, so it can be tailored specifically to your needs. To find out about the iCetana system and how it can help you invest in better business security while protecting your clients, your property, your reputation, and your revenue, contact iCetana today at email@example.com.