The Cost of a Security Breach
October 18 2016, 9:56 am
by Wes Sovis
The Costs Associated with a Data Breach
IBM recently released a study on the cost of a data breach for businesses, and it certainly makes for some interesting reading. Well, interesting might not be the correct word. Frightening is perhaps more applicable, given the severity of the fiscal impact a data breach can have on a business's bottom line initially, as well the consequences down the road.
We put together a blog a few weeks back on some cyber security basics to protect your business from attacks and vulnerabilities, which you may want to read after you see some of the numbers associated with the report.
A Data Breach by the Numbers
According to the report, the cost a business who has sensitive data lost or stolen is $221 per record. Even if you manage a small amount of data records for your business or for customers, this represents a potentially detrimental amount of lost capital. Consider, then, the implications of Yahoo's announcement that over 500 million of their email users had their accounts compromised in 2014. The costs associated with addressing such a wide-scale breach are mind-boggling. And the long-term consequences could prove even more costly, with The New York Times reporting that Verizon will seek to renegotiate their purchase of Yahoo as a result of the breach.
Here are some of the most important takeaways from the report that we think businesses should know.
-Of the business surveyed, criminal attacks were the number one source of breached data, representing 50% of data breaches. Unfortunately, 23% of breaches were caused by negligent employees. This is the most unfortunate type of breach because these are usually the most preventable.
-Some specific industries have data breach costs that are much higher than others. For example, the financial, life science, and healthcare industries have data breach costs significantly higher than the average cost of $221 per lost record.
-The costs associated with the lost business due to a data breach are going up. This year, companies will lose an average of $3.97 million in lost business, up from $3.72 million just last year. These costs are calculated by having to spend more on customer acquisition, lost customers and lower consumer trust in the company who experienced the breach.
How to Lower Your Costs After a Data Breach
Of course, the best way to keep the costs of a data breach low is to not experience one in the first place. Working with a security firm can be expensive, but having a web development firm go over your digital infrastructure could be the best way to see the red flags before it's too late. The report also notes that having a plan in place to deal with a data breach lowers the costs significantly. This could be as simple as setting up protocol with your IT department to minimize the number of records vulnerable during or directly after a breach. Even just having guidelines for employees to follow can help protect your assets from negligence.
If you have any questions about how to keep your business safe from malicious attacks or how to minimize the likelihood of a data breach, just get in touch.
Swell Development is a web development firm based in Grand Rapids, MI. Swell has a combined 50 years of experience creating web applications, hosting websites and applications, and consulting businesses on server management and security measures. You can find out more about them, as well as frequent updates on the web development industry, by following them on Facebook, Twitter, LinkedIn or Google+.