Businesses in Germany have faced a staggering €267bn in losses over the past year due to cybercrime and industrial sabotage. The financial impact, chronicled in a survey of 1,000 firms in the country carried out by the IT industry association Bitkom across multiple sectors, marks a 29% increase from the previous year.
“The threat situation for the German economy is worsening,” concluded Bitkom’s president, Ralf Wintergerst. The study also found that nearly 80% of German companies reported incidents involving data theft, industrial espionage, or sabotage in the last 12 months. Of these, about 45% of the attacks were traced back to China, representing an increase from 42% in the previous year. Meanwhile, 39% of the attacks were attributed to Russia, a decline from 46% in the previous year. The attacks frequently targeted sensitive information, such as customer data, access credentials, and intellectual property like patents.
China up, Russia down in number of cyberattacks on German firms
Wintergerst pointed out that the current global tensions are reflected in the increasing frequency and sophistication of cyberattacks. He further noted that German and Chinese companies remain deeply intertwined in a globalised economy, making it challenging to unwind decades of economic cooperation and supply chain integration.
“What has been built up over several decades in terms of supply chains, joint ventures, and other structures cannot be reversed within a few years,” said Wintergerst. “It’s simply impossible.”
The increasing cyber threats have prompted many companies to allocate more resources to digital security. The survey showed that companies have raised their average IT budget allocation for cybersecurity from 14% to 17% this year. However, only 37% of the surveyed companies have established emergency plans to handle security breaches within their supply chains.
The need for better preparedness has become evident as more businesses face threats that could severely disrupt operations and lead to significant financial losses.
Recent incidents underscore the severity of the threat. For instance, it was revealed that Chinese hackers had been spying on German car manufacturer Volkswagen for years, causing significant consternation within the industrial sector. The German government and businesses have become increasingly cautious of overreliance on any single country, such as China, for critical products and supply chains.
Intertwined supply chains aid cybercrime
Despite the risks, the relationship between German companies and China remains complex. China is still a vital economic partner for Germany, even as it is viewed with increasing suspicion. The country’s dual role as a crucial market and competitor complicates efforts to manage cyber threats effectively.
While some German firms are keen to diversify and reduce their exposure to Chinese suppliers, the deep integration of global supply chains makes rapid changes difficult.
A similar study on cyberattacks by Resilience Cyber Insurance Solutions found that ransomware gangs are increasingly exploiting internal disruptions at companies undergoing mergers or acquisitions. The report highlighted that a 36% increase in global M&A deal volume in 2023 provided new opportunities for cybercriminals to target points of vulnerability within organisations.
The study also revealed that 64% of all breaches reported to Resilience involved some form of ransomware, with the financial impact of these claims rising by 411% year-on-year.
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