According to Ponemon Institute’s ninth annual Cost of Data Breach Study, sponsored by IBM, the cost incurred for each lost or stolen record containing sensitive and confidential information increased more than 9% to $145.
And, it found that the probability of a company having a data breach involving 10,000 or more confidential records is 22% over a two-year period.
“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 Larry Ponemon, chairman and founder of Ponemon Institute, in a statement. “This year’s Cost of Data Breach Study also provides guidance on the likelihood an organization will have a data breach and what can be done to reduce the financial consequences.”
Root causes of data breaches differ among countries and affect the cost of the breach. On average, the most costly breaches occurred in the US and Germany at $201 and $195 per compromised record, respectively (and $246 and $215 per compromised record, respectively, for malicious or criminal attacks—which are the most common kind). The least expensive data breaches on average were in India and Brazil at $51 and $70, respectively (and $60 and $77 per compromised record for malicious break-ins).
Interestingly, 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.
Countries most likely to experience a data breach include India, Brazil and France. 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.
Malicious code and sustained probes have increased the most in terms of attack vectors. 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 report also looked into cost-mitigation factors. It wound that overall, a strong security posture was critical to decreasing the cost of 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.
Meanwhile, the involvement of business continuity management also reduced the cost of data breach, by an average of almost $9 per record. And, 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 per record.
Unfortunately, only 38% of companies have a security strategy to protect its IT infrastructure. A higher percentage (45%) has a strategy to protect their information assets. 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.
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.
“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 for the 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.”