Cyber security has been a major topic of discussion throughout 2015 and 2016, with no signs of cyber attacks slowing down. Several organisations have faced high-end data breaches with millions of stolen credentials. What is more, recent studies have discovered that the average consolidated total cost of a data breach this year grew from €3.3 million to €3.5 million and the average cost incurred for each lost or stolen record containing sensitive and confidential information increased from €135 to €139.
Cyber crime will cost businesses over €2 Trillion by 2019 and the targets are no longer just large enterprises, but organisations of all sizes. IBM and Ponemon Institute have released their newest study presenting a global analysis of the costs related to data breaches. Not only have they analysed cost data, but the study also looks at the likelihood a company having one or more data breaches in the next 24 months. The numbers are alarming and companies are no longer at rest, which is why every organisation needs a strong cyber security strategy. Here is a quick summary of the study highlighting the most important findings.

Regulated industries, such as healthcare and financial services, have the most costly data breaches because of fines and the higher than average rate of lost business and customers.

Hospitals and healthcare organisations have some of the strictest regulations of any industry. Due to the sensitive data healthcare organisations maintain on their networks, cybercriminals and malicious attackers primarily target them and simply being compliant does not reduce the risk of data breaches. Moreover, Banking institutions, merchants, insurance companies and credit card processors are under intense pressure to ensure that their customers’ data and assets are secured. Customer data can be compromised through various methods including SQL injections, phishing, skimming etc.

Incident response teams and extensive use of encryption decrease the cost of data breach.

Companies are beginning to realise how catastrophic an attack could be for the reputation of the organisation and the costs involved and that a quick and efficient response will lead to the minimisation of potential damages. The study by IBM and Ponemon Institute clearly showed that having an incident response team (whether it is an in-house team or outsourced) and the use of encryption reduced the costs by 10%.

The average cost has grown because organisations are losing customers.

Take the example of one of the biggest data breaches, TalkTalk. TalkTalk lost 250,000 customers post-breach and had a major decline in share value. According to the study, countries like France, Japan and Italy had problems retaining customers following a data breach and higher costs involved. The industries most affected are financial, health and services.

There are other key findings from the report relating to the root causes of a data breach, the likelihood for organisations to have a data breach, the factors that influence the cost of data breach etc. Read entire report here.

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