The true cost of a data breach

By Mike Jones | March 20, 2012 | 1 Comment

Mike Jones, Symantec, warns organisations about the significant costs associated with data breaches for businesses

Experts predict that by 2020 the UK will have over 25 million new apps, 31 billion connected devices and over 50 trillion gigabytes of data. This means that by 2020 the amount of data we use will have grown to over 35 trillion gigabytes, a 44-fold rise on 2009 figures.

Predicting the future of data growth is relatively easy, but proposing ways of making that data secure is the complicated bit.

Data is extremely valuable to businesses and a data breach or a loss can be very costly. In fact recent Symantec research into the cost of a data breach found that the average data or system failure costs UK organisations £1.9 million or £71 per record.

At a time when businesses in the UK remain economically cautious, data and IP protection is critical, not only if a business wants to remain competitive, but also if they want to avoid potentially large fines as a result of not complying with data regulation.

It’s important to note that the vast majority of data breaches are preventable, but securing information clearly continues to challenge organisations at all levels.

Symantec’s recent cost of a data breach study shows how companies with information protection best practices in place can greatly lower their potential data breach costs.

Here are some of the key findings from Symantec’s cost of a data breach study:

System failures overtook employees as the most common threat to a business’s data. In this year’s study, 37 percent of all data breach cases involved a system failure, up 7 per cent on 2009 and accounts for the biggest rise of any cause of a data breach attribute. It replaced negligence, which at 34 percent dropped 11 points. Lost or stolen devices and third-party mistakes each fell slightly. Malicious or criminal attacks rose 5 points to 29 percent.
Recognition of the risk of insecure mobile devices connecting to company networks jumps to 64 per cent. The likelihood of insecure mobile devices including smartphones and tablet computers causing a data breach is 84 percent – an increase of 9 percent on 2009. Organisations are recognising this risk with 64 percent stating mobile device encryption was very important or important, an increase of 13 points from 2009.
Lost business ranked as the biggest contributor to overall data breach costs. Recovering customers, profits and business opportunities after data breaches posed the greatest cost hurdles for companies in 2010. Lost business accounted for 48 percent of the total, an increase of 2 percent from 2009. Other contributing factors were costs sustained in the immediate aftermath of the event, such as resetting accounts and communicating with customers (known as ex-post response) at 23 percent and costs related to detection / escalation at 20 percent.

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