The results of an IBM Security study released today reveals that the financial cost of a data breach has climbed dramatically over the last five years.
The report found that, as a result of the increased regulation, the complex process of resolving criminal attacks and the multi-year impact of breaches financially speaking, the cost of a breach has climbed 12 percent in a five year period to $3.92 million.
For smaller and medium size businesses this figure drops slightly to an average cost of $2.5 million. That having been said as these business are smaller the financial cost of a data breach can be crippling.
While the study was conducted globally, South Africa was included in IBM Security’s research and the findings are frightening.
Drawing on four years worth of data the study found that the average cost of a data breach locally amounts to R43.3 million (~$3.1 million) which puts us below the global average, but only just.
The cost per record lost or stolen amounts to R2 200 which is above the global average of $150 (~R2 088).
Human error or theft?
IBM’s research also looked at the sources of data breaches and both cybercriminals and human error are to blame.
Malicious or criminal attacks now account for 51 percent of data breaches while human error accounts for 49 percent.
As to cost, malicious attacks average $4.45 million while data breaches resulting from human error cost $3.5 million and $3.24 million is the cost associated with “system glitches”.
“One particular area of concern is the misconfiguration of cloud servers, which contributed to the exposure of 990 million records in 2018, representing 43% of all lost records for the year according to the IBM X-Force Threat Intelligence Index,” said IBM in its report.
Lowering the cost
While the results of the research make for dire reading there are actions that can be taken to lower the cost of a breach.
For instance, companies with an incident response team that regular tests incident response measures saw a $1.23 million reduction in the total cost of breach compared to companies which had neither.
Encryption is also earmarked as a cost saving factor in terms of data breaches with the technology lowering the cost a breach by $360 000.
IBM Security has created a rather nice website detailing all the findings in its Cost of a Data Breach Report 2019 which we highly recommend you visit when you have a moment.[Image – CC 0 Pixabay]