From lost business to regulatory fines and repair costs, breaches of data security have far-reaching consequences. IBM Security released a Cost of Data Breach Report in 2019. The report analyzes the costs of data breaches reported from 507 organizations in 16 geographies and 17 industries.
On average, each data breach costs $ 3.92 million, with 25,575 reports being lost. It takes an average of 279 days to identify a data breach. These figures are on a global basis. The country with the highest average cost per data breach is 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).
The data breach life cycle
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 emerged in this study. In Scandinavia, the average cost per data breach is $ 2.3 million. This is somewhat lower compared to the global average, but still corresponds to a staggering 24 million Swedish kroner.
Long-lasting effects
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.
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 are higher in highly regulated environments (e.g. health care and the financial industry). 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.
How can your company avoid this?
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.