Cost of Data Breaches Rising Globally, Says ‘2015 Cost of a Data Breach Study: Global Analysis’
Every corner of the organization — from human resources to operations to marketing — is generating, acquiring, processing, storing and sharing more data every day. Cybersecurity threats have conditioned organizations to defend the full depth of this sensitive information and infrastructure from a global threat landscape.
2014 will be remembered for such highly publicized mega breaches as Sony Pictures Entertainment and JPMorgan Chase, as well as the cost thereof. While these attacks stole the headlines, thousands of other breaches took place around the world, resulting in the theft of over 1 billion records of personal identifiable information (PII).
In the past, senior executives and boards of directors may have been complacent about the risks posed by data breaches and cyberattacks. However, there is a growing concern about the potential damage to brand reputation, class-action lawsuits and costly downtime that is motivating executives to pay greater attention to the security practices of their organizations.
High-profile data breaches are a wake-up call to enterprises everywhere. However, they pose the question: Why did IT fail to stop the data breach? The answer is that it’s an enterprise-wide issue, not just a technology problem.
About the 2015 Cost of Data Breach Study
IBM and Ponemon Institute are pleased to release the “2015 Cost of Data Breach Study: Global Analysis.” According to our research, the average total cost of a data breach for the participating companies increased 23 percent over the past two years to $3.79 million.
In this year’s study, 350 companies representing the following 11 countries participated: the U.S., the U.K., Germany, Australia, France, Brazil, Japan, Italy, India, the Arabian region (United Arab Emirates and Saudi Arabia) and, for the first time, Canada.
The average cost paid for each lost or stolen record containing sensitive and confidential information increased 6 percent, jumping from $145 in 2014 to $154 in 2015. The lowest cost per lost or stolen record is in the transportation industry, at $121, and the public sector, at $68. On the other hand, the retail industry’s average cost increased dramatically, from $105 last year to $165.
For the second year, our study looks at the likelihood of a company having one or more data breaches in the next 24 months. Based on the experiences of companies participating in our research, we believe we can predict the probability of a data breach based on two factors: how many records were lost or stolen and the company’s industry.
Examining Other Factors
For the first time, the Cost of Data Breach Study examined two factors that affected the financial consequences of a data breach. The first is executive involvement in their organization’s IT security strategy and response to data breaches. The second is the purchase of cyber insurance to mitigate the cost of a data breach.
With the increasing volume and cost of data breaches, C-level executives have begun considering IT security a larger business risk. This shift has spurred increased interest in cyber insurance.
Because the threat to high-value enterprise information is ever-changing, it is essential to constantly monitor the threat environment, and to understand who poses a threat, what their motivations are and which methods they prefer. Lost business has potentially the most severe financial consequences for an organization. The growing awareness of identity theft and consumers’ concerns about the security of their personal data following a breach has contributed to the increase in lost business.
Data protection is fundamentally a business challenge in addition to being an IT challenge. With the influx of new threats and the changes in regulatory requirements, an organization’s security needs are continually evolving. Enterprises need to be prepared and employ world-class services that address threats across each aspect of their business so they can build a strong security posture that reduces costs, improves service and manages risk.