Cost of Data Breaches Up 15%

[Audrey McNeil <audrey () riskbasedsecurity com>]

http://mobileenterprise.edgl.com/news/Cost-of-Data-Breaches-Up-15-92654

The Ponemon Institute released its 9th annual Cost of Data Breach Study:
Global Study, sponsored by IBM. According to the study of 314 companies
spanning 10 countries, the average total cost of a data breach increased
15% in the last year to $3.5 million. The study also found that the cost
incurred for each lost or stolen record containing sensitive and
confidential information increased more than 9% to $145.

The ninth annual study involved the collection of detailed information
about the financial consequences of a data breach. For purposes of this
research, a data breach occurs when sensitive, protected or confidential
data is lost or stolen and put at risk.

Ponemon Institute conducted 1,690 interviews with IT, compliance and
information security practitioners representing 314 organizations in the
following 10 countries: United States, United Kingdom, Germany, Australia,
France, Brazil, Japan, Italy, India and, for the first time, the Arabian
region (a consolidation of organizations in the United Arab Emirates and
Saudi Arabia).

“The goal of this research is to not just help companies understand the
types of data breaches that could impact their business, but also the
potential costs and how best to allocate resources to the prevention,
detection and resolution of such an incident,” said Dr. Larry Ponemon,
Chairman and Founder of Ponemon Institute. “This year’s Cost of Data Breach
Study also provides guidance on the likelihood that an organization will
have a data breach and what can be done to reduce the financial
consequences.”

Highs and Lows
All those interviewed are knowledgeable about their organization’s data
breach and the costs associated with resolving the breach. All
participating organizations experienced a data breach ranging from a low of
approximately 2,400 to slightly more than 100,000 compromised records,
which identifies the individual whose information has been lost or stolen
in a data breach.

“Clearly, cybersecurity threats are a growing concern for businesses,
especially when we consider how persistent data has become in the age of
cloud and mobility,” said Kris Lovejoy, General Manager, IBM Security
Services Division. “A data breach can result in enormous damage to a
business that goes way beyond the financials. At stake is customer loyalty
and brand reputation.”

The following are key takeaways from the Global Cost of Data Breach Study:

- The most costly breaches occurred in the U.S. and Germany at $201 and
$195 per compromised record, respectively. The least expensive data
breaches were in India and Brazil at $51 and $70, respectively.

- Root causes of data breaches differ among countries and affect the cost
of the breach. Countries in the Arabian region and Germany had more data
breaches caused by malicious or criminal attacks. India had the most data
breaches caused by a system glitch or business process failure. Human error
was most often the cause in the UK and Brazil.

- The most costly data breaches were those caused by malicious and criminal
attacks. The U.S. and Germany paid the most at $246 and $215 per
compromised record, respectively. These types of data breaches were least
costly for companies in India and Brazil at $60 and $77 per compromised
record, respectively.

- A strong security posture was critical to decreasing the cost of a data
breach. On average, companies that self-reported they had a strong security
posture were able to reduce the cost by as much as $14 per record.

- The involvement of business continuity management reduced the cost of
data breach by an average of almost $9 per record.

- The appointment of a Chief Information Security Officer (CISO) to lead
the data breach incident response team reduced the cost of a breach by more
than $6.

- Countries that lost the most customers following a data breach were
France and Italy. Companies in the Arabian region and Brazil experienced
the lowest loss of customers.

- The probability of a company having a data breach involving 10,000 or
more confidential records is 22% over a two-year period. Countries most
likely to experience a data breach include India, Brazil and France.

Consistent with previous Cost of Data Breach studies, the most common cause
of a data breach is a malicious insider or criminal attack. In this year’s
study, we asked companies represented in this research what worries them
most about security incidents, what investments they are making in security
and the existence of a security strategy. Following are some of the key
findings:

- The greatest threats to the companies in this study are malicious codes
and sustained probes. According to threats increased; but 30% of breaches
concerned a negligent employee or contractor (human factor), and 29%
involved system glitches that includes both IT and business process
failures.

- Only 38% of companies have a security strategy to protect its IT
infrastructure; 45% have a strategy to protect their information assets.


- Malicious code and sustained probes have increased the most. Companies
estimate that they will be dealing with an average of 17 malicious codes
each month and 12 sustained probes each month. Unauthorized access
incidents have mainly stayed the same and companies estimate they will be
dealing with an average of 10 such incidents each month.


- The majority of companies (50%) have low or no confidence that they are
making the right investments in people, process and technologies to address
potential and actual threats.


- Ideally companies would like to invest $14 million over the next 12
months to execute their organization’s security strategy. However, in the
next 12-month period, companies anticipate having an average of about half
that amount, or $7 million, to invest in their security strategy.

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