The cost of a data breach has risen 12 percent over the past 5 years and now costs $3.92 million on average, according to an IBM study.
Companies with less than 500 employees suffered losses of more than $2.5 million on average – a potentially crippling amount for small businesses, which typically earn $50 million or less in annual revenue. While an average of 67 percent of data breach costs were realized within the first year after a breach, 22 percent accrued in the second year and another 11 percent accumulated more than two years after a breach. The longtail costs were higher in the second and third years for organizations in highly-regulated environments, such as healthcare, financial services, energy and pharmaceuticals.