A data breach is, unfortunately, a common occurrence in 2019. Countless companies and governments worldwide have suffered ransomware attacks and DDoS attacks. Many were left helpless to deal with the damage. It has come to the point that a data breach can cost a company millions of dollars in damages. There are multiple reasons for this. First, the data companies lose is sometimes too valuable to let go, so they find it easier to pay to get it back. Yes, this is risky because there is no guarantee, but in their helplessness they have no choice.
On top of that, companies must repair and upgrade their systems as well. The Australian government, for instance, is coming down hard on its state governments for not updating their online security systems. The US government is doing the same, and every evaluation finds the security systems wanting.
How much does a data breach cost?
Fortune magazine listed the average cost of a data breach by industry in 2016, and it varied significantly. However, it hovered between the 2 and 3 figure limits. So, why do some data breaches cost millions if this is the case?
According to a study by IBM Security and Ponemon Institute, an average data breach can cost $3.86 million. Mega data breaches, which lose 1 million to 50 million records, can cost between $40 million and $350 million.
The study reached these numbers through interviews with officials at five hundred companies that had experienced data breaches. They collected information on hundreds of cost factors, including legal fees, reputation losses, and the cost of investigations.
What the Yahoo! sale shows about breach costs
This is why the range of costs is so tremendous. Look at how much trouble Yahoo! got into. It disclosed that attackers had breached over a billion of its accounts, right as Verizon was acquiring it. That snafu led Verizon to shave $350 million off its original price of $4.8 billion (proposed in 2016). Estimates put the average cost of a mega-breach at $118 million. Verizon finally acquired Yahoo! for $4.48 billion.
The number of mega breaches is also increasing every year. According to the IBM and Ponemon study, there were 9 mega breaches in 2013. That number rose to 16 in 2017.
How to lower the cost of a data breach
You can minimize the risks and costs of a data breach in four ways. Have a CERT (Computer Emergency Response Team) ready, because it limits the losses during a cyberattack. Encrypt your data records. Always keep a backup, so your data loss is not permanent. Finally, train your employees to handle and respond to data breaches, so detection and response get faster and more effective.
Most companies have no idea how data breaches can cost so much. Knowing where the costs lie, and how to reduce them, helps companies invest their resources more strategically. That lowers the enormous financial risks at stake.
In today’s fast-paced tech-everything society, the odds work against any business, particularly those in regulated industries. For organizations that leave themselves vulnerable, it is no longer a case of if a breach will happen, but when.
Is your company ready for a big data breach?
Data breach preparedness is a critical component of doing business in the modern era. The threat of a data breach keeps increasing, so a detailed response plan is no longer optional, but essential. Practice that plan and revisit it throughout the year. Speak with a Volico security professional to see what preventative measures your IT department should take against data breaches.
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