Security Newswire

Cost of a Data Breach Rose to $3.5M in 2013

May 9, 2014
/ Print / Reprints /
ShareMore
/ Text Size+

According to the Ponemon Institute's ninth annual Cost of Data Breach Study, the consolidated total cost of a data breach increased 15% in the last year, to $3.5 million. But some experts say those figures likely underestimate the full scope of the damage.

The study also found that the cost incurred for each lost or stolen record containing sensitive and confidential information increased more than nine percent to a consolidated average of $145.

The research 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 an organization will have a data breach.

The following are key takeaways:

  • 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. 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 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.

"Clearly, malicious insiders and criminal attacks 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."

Consistent with previous Cost of Data Breach studies, most often the common cause of a data breach is a malicious insider or criminal attack. We asked companies what worries them most about security incidents. Following are some of the key findings:

  • The greatest threats to the companies in this study are malicious code and sustained probes. According to threats increased.

  • Only 38 percent of companies have a security strategy to protect its IT infrastructure. A higher percentage (45 percent) has 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.

To download the complete report please visit: www.ibm.com/services/costofbreach

Did you enjoy this article? Click here to subscribe to Security Magazine. 

You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

ASIS 2013 Product Preview

ASIS International 59th Annual Seminar and Exhibits, September 24-27 in Chicago, Illinois, will include an exhibit hall packed with innovative security solutions. Here are some of the products that will be shown at ASIS this year.

Podcasts

Virtualization and Data Center Security: What You Need to Know for 2014

Data centers are increasingly becoming the center of the enterprise, and data center and cyber security is following the same path for security departments. According to Justin Flynn, a consultant at the Burwood Group, the virtualization of data centers allows enterprises to scale more easily and faster, with a smaller footprint.

However, hosting enterprise data in the cloud can make intrusion detection more difficult – how can enterprise security leaders team up with other departments to keep aware of cyber risks and traffic, and physical and data compliance during the virtual transition? How can CISOs and CSOs discuss cyber threats with the C-Suite to get the resources they need? And how can the proper infrastructure test and verify possible malicious attacks? 

More Podcasts

Security Magazine

August 2014

2014 August

In the August issue of Security Magazine, read about the public-private partnerships and the future of DHS with Frank Taylor, sneak a peek at the ASIS 2014 security products, and read a special report on cyber risk and security. Also in this issue find out why America is in desperate need of a CSO and the most common mistakes in Cyber incident response. The security game has dramatically changed since September 11th, read about what enterprises are doing to keep Americans safe and sound.

Table Of Contents Subscribe

Adopting New Technology

How long do you wait before adopting a new technology?
View Results Poll Archive

THE SECURITY STORE

comptiahighriseproductphoto
CompTIA Security+ Certification Study Guide
CompTIA's Security+ certification is a globally-recognized, vendor neutral exam that has helped over 60,000 IT professionals reach further and higher in their careers. The current Security+ exam (SY0-201) focuses more on being able to deal with security issues rather than just identifying them.
More Products

Clear Seas Research

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications,Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.

Vertical Sector Focus: Critical Infrastructures

criticalhomepagethumbFrom terrorism to vandalism, it’s preparedness, response, training and partnerships. Learn about some of the critical security issues facing this sector.

Visit the Critical Infrastructure page to read more.  

STAY CONNECTED

Facebook 40px 2-12-13 Twitter logo 40px 2-12-13  YouTube  LinkedIn logo 40px 2-12-13Google+