Data Breach Costs Are Up. The Third Reason Why Might Surprise You.
Nearly on the same day last week two major reports came out celebrating large anniversaries. On the one end, we saw the 20th annual Internet study from Mary Meeker. Meeker led some of the original industry analysis of the Internet way back in the day and this past week saw her mark twenty years of influencing opinions on the Internet. And quite appropriately, ten years after Meeker’s first look at the Internet we had Ponemon Institute’s first study of data breach costs.
It only took the Internet turning ten for it to be apparent that amongst all the benefits the Internet provides our lives and business, that there was an ugly downside. By now, we have more annual research studies about data breaches than we do about the Internet itself. In fact, in just the last few weeks we have spent hours digesting two of the industries biggest data breach reports, the aforementioned Ponemon and the now highly influential Verizon DBIR (yup, it’s big enough to simply go by an acronym).
Interestingly, those two reports actually intersected but let’s give the latter their day in the sun because, if you’ve been able to do anything for 10 years in security, you are doing something right. And although the report itself has many interesting stats, the reasons for the overall costs of data breach soaring were of the most interest, at least in our world.
According to Ponemon, there are three drivers behind the increased cost of a breach. First, cyber attacks have increased in frequency and, as a corollary, so have the costs to remediate the consequences. The per capita cost increased from $159 to $170 year-over-year. That’s a jump from 42% to 47% of the overall root causes of a breach. In addition, the consequences of lost revenues are having an increased impact. In the aggregate, this rose from $1.33M to $1.57M in 2015. This is due to the abnormal customer turnover, increased acquisition activity, and diminished goodwill that results from such being the target of a malicious attack. But, the most interesting reason given is that data breach costs associated with detection and escalation have gone up.
These costs include forensics and investigations, assessments and audits, and crisis team management. Now at just shy of a whopping $1B, this trend seems to only be picking up speed. Enterprises are only now beginning to deploy the solutions needed to continuously monitor the endpoint and provide a crystal-clear picture of the root cause and full extent of a breach. Organizations need to not only monitor the proliferation of devices in a BYOD world, but also look to amplify the security resources they have already invested in to reduce the costs of these investigations. Threats need to be stopped in real-time, rather than identified retroactively.
As Larry Ponemon mentioned in his webcast with IBM Thursday, “Prevention may not be possible in the world we live in.” With malicious threats becoming more and more common, organizations will have to evolve their M.O. beyond traditional AV solutions and look to the endpoint for complete protection.