The average cost of a corporate data breach increased 15 percent in the last year to $3.5 million, according to a recently released study. The study by the Ponemon Institute, which is located in Michigan, also found that the cost incurred for each lost or stolen record containing sensitive and confidential information increased more than nine percent to a consolidated average of $145.
Companies in the U.S. and Germany paid the most at $246 and $215 per compromised record, respectively. The study indicates that companies having a strong security posture were able to reduce the cost by as much as $14 per record. Consistent with Ponemon’s previous studies, the most common cause of a data breach is a malicious insider or criminal attack. The causes of data breaches vary by country. Human error and system failures can also cause data breaches.
The Ponemon Institute’s ninth annual Cost of Data Breach Study: Global Analysis tallied responses from 314 companies spanning 10 countries. The study is sponsored by IBM. Dr. Larry Ponemon, chairman and founder of Ponemon Institute, explaining the research’s goal, said:
The goal of this research is to not just help companies understand the types of data breaches that could impact their business, but also the potential costs and how best to allocate resources to the prevention, detection and resolution of such an incident.
This year’s Cost of Data Breach Study also provides guidance on the likelihood an organization will have a data breach. The following are among the study’s other key findings:
The consequences of a data breach for a company can be very serious. Kris Lovejoy, general manager, IBM Security Services Division, observed:
Clearly, malicious insiders and criminal attacks are a growing concern for businesses, especially when we consider how persistent data has become in the age of cloud and mobility. A data breach can result in enormous damage to a business that goes way beyond the financials. At stake is customer loyalty and brand reputation.
Companies in the study said that the greatest threats are malicious code and sustained probes. Companies estimate that they will be dealing with an average of 17 malicious codes each month and 12 sustained probes each month. Unauthorized access incidents have mainly stayed the same and companies estimate they will be dealing with an average of 10 such incidents each month. Only 38 percent of companies have a security strategy to protect their IT infrastructure. A higher percentage (45 percent) has a strategy to protect their information assets.
Source: Ponemon Institute
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