Throughout 2017, data breaches were occurring at a record pace in the United States and other parts of the world. You can reduce your exposure by implementing strong preventive security measures, making it harder for cybercriminals to hack into your business. But sometimes, despite your best efforts, your company might still experience a data breach.
Data breaches are not always the result of attacks. They can be caused by human error, system fails, even malicious insiders. But if your approach is to be prepared for a data breach, instead of just hoping it doesn’t happen, that preparation could significantly reduce the costs incurred. According to the “2017 Cost of Data Breach Study“, the top three preparations are:
- Incident response. Set up a team to create a response plan that’s ready to implement the moment a data breach is detected.
- Data Encryption. Identify and protect sensitive business data using encryption software, ensuring it’s secure whenever it’s being transmitted and/or stored
- Training. Educate your employees on how to recognise potential issues, and who to contact if they suspect a breach has occurred
Costs of a Data Breach
For over 10yrs the Ponemon Institute has researched financial impacts of data breaches, gathering data direct from the companies who’ve had them happen. In their report “2017 Cost of Data Breach Study” ( sponsored by IBM Security), they had 400 organizations from around the world participate in the research. Data breach sizes ranged from around 2,600 compromised records, right up to 100,000.Their research determined the average cost per compromised record to be $177AUD. So a business that experienced a 5,000 record data breach could expect a cost to business of $885,000. But this study also found that the average number of records in a data breach is 24,089, sending data breach costs up towards $4.3M. The cost per compromised record is calculated from direct expenses, such hiring forensic experts, and indirect expenses, such as lost customers or business.
Savings Through Preparedness.
The scouts are right, be prepared, even for data breaches. Doing so leads to faster reaction times if one occurs, better coordination when dealing with the event, and effective business communication particularly with your customers. Telling your customers the compromised data was encrypted and useless to anyone, helps to keep their trust and their custom. And when it comes to measuring the savings for being prepared, the “2017 Cost of Data Breach Study” suggests the following:
- Having an incident response plan saves an average of $24 per record
- Data encryption saves an average of $20 per record
- Training/educating employees saves an average of $16 per record
Implementing these three preparation steps has the potential to reduce your data breach costs by $50 per record. This means our example 5,000 record data breach would cost you $635,000 instead of $885,000.
The “2017 Cost of Data Breach Study” highlights that being proactive about data breaches saves your business money and retains customer trust. Yes, implementing security measures helps reduce the risks to your business, but preparation for a data breach event is equally important. Intellect IT can help you on both fronts.