From lost business to regulatory fines and repair costs, breaches of data security have far-reaching consequences. IBM Security released the Cost of a Data Breach Report 2019 by the Ponemon Institute. This analyzes the costs of data breaches reported from 507 organizations in 16 geographies and 17 industries.
On average, each data breach costed $ 3.92 million, with 25,575 reports being lost. It took an average of 279 days to identify a data breach. These figures were taken on a global basis. The country with the highest average cost per data breach was the United States (with $ 8.19 million) and the sector with the highest average cost per data breach is the health sector ($ 6.45 million).
From the global perspective, one can also see the current impact of the costs of cybercrime in 2021. The cost has been estimated to be $ 6 trillion. That is the size of President Biden’s newly proposed budget, which is a mindboggling sum. Nevertheless, this is the harsh reality of the global cost of not taking cybercrime as serious as the situation warrants. In the global economic context, cybercrime is estimated to be, effectively, the third largest economy by the end of 2021.
What kind of breach it is, what industry you are in, region and organizational structure are all factors that influence how long it takes to identify and stop a breach of data security. The report found that malicious attacks are the most common and the most expensive, but human and system errors are still the source of nearly half of the data breaches that emerge in this study. In Scandinavia, the average cost per data breach was estimated to be $ 2.3 million. This was somewhat lower compared to the global average, but still corresponds to a staggering 24 million Swedish crowns.
One of the biggest costs associated with data breach is lost business. Loss of trust from customers has serious financial consequences, and loss of business is the largest of the four main cost categories that contribute to the total cost of a data breach. In addition, due to the increase in digitalisation, there is also the risk of not only losing money, but also human life. In 2020, a patient at a German hospital died due to a ransomware attack.
The consequences of a cyber-attack can last for a long time. In this study, the Ponemon Institute found that 67 percent of costs occur in the first year, 22 percent in the second year, and 11 percent after the second year. Costs were higher in highly regulated environments (e.g., health care and the financial industry). While organizations in a regulatory environment with high data protection had 53 percent of breach costs in the first year, 32 percent in the second and 16 percent more than two years after breach.
Analyst have stated that not only is this trend continuing, but relative costs are also increasing. Cybersecurity Ventures estimated in 2020 an increase of 15% per year for another five years of costs related to cybersecurity. This means that not only are there the aforementioned latent costs, but these costs are always increasing.
Your company should protect, identify, respond, and rectify to avoid cyber-attacks.
Want to learn more about how to protect your business from cyber-attacks? Learn more about our security services here.