The Shocking High Cost of Data Breaches and Data Loss

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The Shocking High Cost of a Data Breach and Data Loss
June 21, 2016
BLOG POSTS

The Shocking High Cost of Data Breaches and Data Loss

We have some bad news, bad news, and just maybe some positive news. Let’s start with the bad – data breaches are at an all-time high. The even worst news is that the cost of data breaches is also at an all-time high. Later we will get to some positive news.

In the beginning of the month, a study has been released from IBM security and the Ponemon Institute stating that the average cost of a data breach has grown to $4 million. This is a decent, but not major, increase from last year’s average, $3.79 million. This is also a 30% increase since 2013.

The high cost of data breaches is causing strife on budgetary constraints. At this point, it is not a matter of if a data breach will happen to your organization, it’s when and are we prepared. The increasing number of data breaches and large cost of remediation is evidence showing that all companies must be prepared to handle this permanent cost in their organization’s budget and incorporate it in their cloud data backup and disaster recovery strategies.

What Makes Up the Cost of a Data Breach?

The study examined the direct (the direct expense to accomplish any remediation activity), indirect (the amount of time, effort, and other organizational resources spent, but not as a direct cash outlay), and opportunity (The cost results from loss of business opportunities due to negative reputation after breach has been reported to victims and public) costs that organizations deal with in a data breach or data loss incident. Some of the associated costs with a data breach can be, but aren’t limited to:

  • Conducting Investigations
  • Determining Victims
  • Incident Response Teams
  • Communications and Public Relations
  • Documents and Disclosures
  • Training
  • Audit and Consulting
  • Legal Services
  • Identity Protection Services
  • Loss of Customer Business

These costs can vary depending on many different factors, such as industry, time to identify, time to contain, etc. Cyber criminals will target the industries with the highest amount of personal data that they keep on file – social security numbers, credit card information, medical records, anything of these sorts. The industry with the highest recorded data breach was healthcare. Following the healthcare sector, Education, Financial, Services, and Life Science were in the top five sectors with the highest data breaches. Within these sectors, the mean time to identify a security breach was 200 days and the mean time to contain the breach was 70 days. Depending on the sector, organizations now lose $158 per compromised record. Meanwhile, in highly regulated industries like healthcare, the damage could be even worse with organizations losing up to $355 per record.

ROOT CAUSE OF DATA BREACHES AND DATA LOSS

Sometimes, the root cause of a data breach can be hard to detect. There are many ways that a disaster of this type could happen. Within the study, they found that the bulk of data breaches, 48% of breaches, happen because of malicious attacks. The other 50% is made up of, 27% system glitches and 25% human error.

The Good News

So, what’s the good news you ask? There are options that can help you prepare for when a cyber-criminal will attack. It is important to have a coordinated remediation plan with clear directions to all staff members and vendors. Also, it is important to have the right resources and skills on your side. Having a prepared and experienced incident remediation team can reduce the cost of the data breach by almost $400,000 on average. And if your team can be speedy with remediation, this can make a huge difference. Being prepared for a data breach or data loss is made up of a proper balance of Backup and Recovery Technology, IT Recovery Plan, and Business Resilience.

Trusting a managed service provider for disaster recovery can help your organization through the worst possible scenario. You will have a trusted partner on your side, acting as an extension of your team to make sure that your information gets recovered and your business can go back to business with little issues. The study found that organizations with disaster recovery management were able to discover breaches 52 days earlier and was able to contain the breach 36 days faster than companies without. Be proactive – start planning for a disaster today with a Managed Service Provider.

NETSERVE365
NetServe365 is a trusted Managed Service Provider in the Pittsburgh region that specializes in Managed Services, Cloud Computing, IT Consulting, and Disaster Recovery. Contact us today for more information about how we can help your organization with any IT issues you are facing. Contact us today!

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