The True Cost of Cybercrime in Brazil

August 4, 2016
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4 min read

Many cybersecurity eyes have been on Brazil in the run up to this summer’s events. Every system has been under scrutiny, from ticket fraud prevention to the clocks used to time athletes. But cybercrime in this region isn’t a new concern; attackers had set their sights on the country long before summer sports fever hit.

Last year, IBM X-Force Executive Security Advisor Limor Kessem detailed the over $8 billion a year Brazil loses to cybercrime. This year’s “2016 Cost of Data Breach Study: Brazil” report from the Ponemon Institute placed Brazil at the top of its list of places most likely to suffer a material data breach involving 10,000 records or more.

Costs Continue to Rise

The cost of data breach report assessed post-breach costs incurred by 33 Brazilian companies in 12 different industry sectors. The research revealed that the average per capita cost of a data breach (per capita cost and cost per compromised record have equivalent meaning in this report) increased significantly, from R$175 (Brazilian Real) to R$225.


Image Source: “2016 Cost of Data Breach Study: Brazil,” Ponemon Institute, June 2016

The total organizational cost of data breach increased from R$3.96 million to R$4.31 million, according to the report.


Image Source: “2016 Cost of Data Breach Study: Brazil,” Ponemon Institute, June 2016

Some sectors saw a steeper rise in costs than others. Specifically, services, energy and financial services had a per capita data breach cost substantially above the overall mean of R$225, with services topping out at R$398. Meanwhile, public sector, transportation and consumer companies had a per capita cost well below the overall mean value.


Image Source: “2016 Cost of Data Breach Study: Brazil,” Ponemon Institute, June 2016

Taking a look at the global costs year over year, Brazil has a comparatively low total per capita cost of data breach, but there was a significant increase from 2015 to 2016.


Image Source: “2016 Cost of Data Breach Study: Global Analysis,” Ponemon Institute, June 2016

In general, the more records lost, the higher the overall cost of the data breach. Brazilian companies that suffered breaches of less than 10,000 records incurred an average cost of R$1.88 million. In larger breaches of 50,000 records or more, the cost skyrocketed to R$6.95 million.

One additional data point to note: The total cost of a breach goes up if customer churn is a factor. This includes losing a customer due to bad publicity and loss of customer confidence post-breach. When customer churn goes over 4 percent, the added cost of breach management can reach R$5.42 million. That number goes down to R$3.81 million when churn is under 1 percent.

Churn rates vary by industry. Services, financial and energy had relatively high churn rates, while the public sector had a low churn rate.

Digging Into the Roots of Cybercrime in Brazil

The report broke down root cause of data breach into three main categories: malicious or criminal attack, system glitch and human error. Although a system glitch could have been ultimately connected to a human error, the report looked at whether an individual was directly connected to the breach.

For example, a web application with a SQLi vulnerability would be categorized as a system glitch, while a user leaving a USB drive with sensitive data at a restaurant would be considered human error.

The graphic below represents a summary of the main root causes for the 33 Brazilian organizations in the report. Malicious attacks top the list with 40 percent, while the remaining 60 percent is split evenly between human error and system glitches.


Image Source: “2016 Cost of Data Breach Study: Brazil,” Ponemon Institute, June 2016

Malicious incidents are not only more common, but they’re also more costly. The per capita cost of data loss caused by a malicious incident was R$256. System glitches had an average per capita cost of R$211 and human error was R$200.


Image Source: “2016 Cost of Data Breach Study: Brazil,” Ponemon Institute, June 2016

Reducing the Cost of a Data Breach

The good news is that despite the rising costs of breaches, there are steps Brazilian organizations can take to decrease those costs.

As shown in the graphic below, having an incident response plan, using encryption, involving the BCM team, and implementing employee training and threat sharing can significantly decrease the per capita cost of a data breach. Availability of an incident response team, for example, reduced the average cost of data breach from R$225 to R$192.4 (decreased cost = R$32.6).

Conversely, some factors contributed to the increased cost of a breach. These include extensive cloud migration, third-party involvement and lost or stolen devices. A data breach caused by extensive migration to the cloud increased the average cost to as much as R$258.4 (increased cost = R$33.4).


Image Source: “2016 Cost of Data Breach Study: Brazil,” Ponemon Institute, June 2016

Interested in emerging security threats? Read the latest IBM X-Force Research

Diana Kelley
Executive Security Advisor, IBM Security

Diana Kelley is an internationally recognized information security expert, speaker, strategic advisor, market analyst and writer. She has over 20 years of IT...
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