Data breaches continue to make news in the modern workplace with their impact on the victim firm raising concerns. But more concerning is what the true costs of a data breach mean for a business. Modern businesses are continually upping their cybersecurity measures in a bid to lower the costs of a potential data breach. Scammers target firms with backdated security systems, as they often have vulnerabilities to exploit.
Successful data breaches lead to substantial losses, downtimes, and reputational damage. Firms also lose sensitive details of clients, and they face various legal battles. These damages can harm a growing business or even force it to close.
Clients always ask BC Networks how they can protect their networks and data against breaches. BC Networks is a leading provider of managed IT services. Our experts wrote this article to help you understand the threat posed by data breaches and how to mitigate them.
A ZDNet article states that a ‘mega’ data breach causes an average loss of about $392 million. These expenses involve the costs of fixing or replacing the affected part and paying for the damages.
Regulators are responding to data breaches with stringent laws against firms that do not prioritize cybersecurity. Companies that do not protect data get class-action and regulatory lawsuits. The rampant attacks are making the cyber insurance industry thrive.
Data breaches happen despite these measures. Some attacks have resulted in attackers stealing consumer details and selling them on underground forums or using them for identity thefts.
Organizations incur substantial expenses in the aftermath of a data breach. They spend a lot to repair systems, upgrade their infrastructure, and legal fees or compensation after losing lawsuits. The sums involved keep rising every year with the average figure for the IBM report representing a significant rise from previous years.
IBM published its annual Cost of a Data Breach Report. According to their findings, the average data breach costs $3.86 million. This sum represents a decrease of 1.5% from the average of 2019. Fixing the damages caused by the data breach costs around $392 million on average, an increase of $4 million from the figure of 2019.
From their statistics, an organization with 40–50 million records, the fee on average is $364 million, could face an expense up to $175 for every person’s data stolen.
The researchers from the Ponemon Institute interviewed over 3,200 security professionals. These experts work in companies that experienced a data breach in the past year.
Compromised insider accounts and employees are some of the most expensive causes of data breaches. The two factors bring the average cost of a data breach to $4.77 million. About 80% of cases that involved insider accounts led to the exposure of customer details.
Close to 40% of data breaches involved compromised or stolen account credentials and cloud misconfiguration. IBM states that in one of every five incursions, attackers used compromised account details as an entryway. This infiltration exposed over 8.5 billion records in 2019. Cloud misconfiguration is responsible for about 20% of network breaches.
Attackers also exploit third-party vulnerabilities. They take advantage of loopholes, such as unpatched security flaws and zero-days. Organizations that fall victim to such attack patterns incur a loss of up to $4.5 million.
State-sponsored attacks, such as those done by APT (Advanced Persistent Threat) groups, are less prevalent. They account for about 13% of the data breaches that companies report. The damages incurred because of these characters are often higher than those of other attacks. Organizations need an average of $4.43 million to recover from the infiltration.
Companies with cyber insurance often pay $200,000 less than the average cost borne by those without it. Most of the payouts are for consultancy services and legal services for the firms.
The IBM report states that machine learning, automation, and AI can be valuable tools against data breaches. They can reduce incident response duration by up to 27%. Responding to these attacks faster can give a company the advantage it needs to mitigate the impact of a data breach.
A data breach can lead to many losses for your firm:
- Financial Loss: you may lose money to fixing the breached network, compensating individuals whose data you lost, and through fines by regulatory agencies.
- Reputational Damage: statistics show that close to a third of customers stop doing business with a firm once attackers breach their IT infrastructure. News of your firm being a victim of a data breach makes clients lose trust in your enterprise. They may move away as they value their data. The firm will struggle to attract new partners.
- Operational Downtime: you may need to shut down your operations to contain or investigate a data breach. This closure may last days or weeks, depending on the extent of the attack.
- Loss of Sensitive Data: attackers may target your database. They may sell or use the data they steal for malicious purposes, such as identity theft.
- Legal Battles: clients or regulators may Institute legal actions against a firm after a breach. These cases may lead to hefty fines and sanctions.
BC Networks provides business IT services and technical support. We have been a reliable IT solutions partner for companies from various industries for over 30 years. Our strategic partnerships and prioritizing clients’ needs have made us the leading managed IT services company.
BC Networks offers various IT services, including cloud solutions, managed IT services, IT consulting services, cybersecurity, and data recovery solutions. We tailor our services to suit your needs. Our specialists analyze your IT infrastructure and inform you of ways to leverage IT services to achieve your organizational goals.
The costs and risks your business is exposed to by lacking adequate security continue to rise. Cyberattackers on the other hand continually improve their scams and target firms that do not have the right cybersecurity protocols. Contact BC Networks to learn more about how you can protect your business.