Data breaches are bad news. Whether it’s the CEO, the CISO or a network administrator, data breaches represent a significant threat which can have potentially catastrophic consequence. The threat of data breaches has only increased in recent years leading to the biggest enterprises rushing to understand, identify and secure this threat.
What is a Data Breach?
Data breach occurs when confidential data of an organization is lost or illegally obtained by miscreants for financial gains or another purpose. A data breach can have a paralyzing effect on any organization in the form of impaired operations, lawsuits, customer loss, and brand erosion to name a few.
Some of the major causes of data breaches are:
- Weak or Stolen Credentials
- Social Engineering
- Insider Threats
- Application Vulnerabilities
- Physical Theft & Loss
Despite all the warnings around, organizations can often underestimate or undermine the cost and impact of a data breach. There are two sides to the impact: a financial and a reputation side.
A report by an extremely reputed organization threw up some chilling numbers regarding the true cost of a data breach.
- The average total cost of a data breach is a humongous $3.86 million and that’s an increase of almost 7% compared to 2017
- The average cost per lost or stolen data record is $148
- The likelihood of a breach to happen again is 27.8% percent
- The average mean time to identify a data breach was 197 days and to contain one was 69 days
- However, companies that contained a breach in less than 30 days managed to save over $1 million
- A mega breach of 1 million records has an average total cost of $40 million
Some of the other key findings were:
- Data breaches cost the most in the United States ($7.91 million) and the Middle East ($5.31 million) with the highest average per capita costs in the US and Canada respectively
- Data breaches caused by malicious and criminal attacks had the highest costs ($157 per breach) compared to data breaches caused by system glitches and human error or negligence
- Data breaches also have severe repercussions on customer trust. Organizations that lost less than one percent of their customers due to a data breach had an average total cost of $2.8 million compared to organizations who lost more than four percent of their customers who suffered average costs of $6 million
Apart from the financial aspect, there is also another aspect to data breaches which can be impossible to quantify. This is the intense damage data breaches cause to an enterprise’s reputation and brand. If customer data is lost there, many years of goodwill can be immediately cost. Customers start having negative perceptions of the organization – they are perceived as a brand which does not take their data serious and does not give importance to cybersecurity. Many customers would stay away from interacting with such an organization.
In a long run, this can cause disastrous damage to an organization. They have to make a renewed effort and start from scratch just to ensure their previous customers return. On top of that, they have to find some way and convince new customers to trust them.
Employing a reliable Unified Threat Management (UTM), coupled with endpoint security solution, can give organizations what they need to reduce the risk of data breaches. However, it would not be practical to label such measures as a ‘foolproof’ system to deal with such threats. As mentioned, it all depends on what organizations intent to protect, their understanding of the current threat landscape, and up to what extent they can go to secure their infrastructure.
As an IT security partner for your business, Seqrite provides comprehensive security from advanced cyber threats. To know more