During the past couple of days we've learned of breaches at Experian and Scottrade in a trend of major data breaches that doesn't seem to be slowing down anytime soon. Breach after breach, companies, corporations and even government agencies are scrambling to fill in holes in their cyber security, repair the damage breaches inflict on their customers and maintain the public's confidence in their ability to protect their data.
The costs of preventing successful cyberattacks are astronomical and growing.
According to Ponemon Institute's sixth annual study, U.S. companies spent $15.4 million in cybercrime costs this year—a 19 percent jump from last year and an 82 percent jump from six years ago when Ponemon Institute first produced their study.
The study shows that the costs among different U.S. companies varied widely, but the average cost is about $1.9 million, a bargain compared to the global average of $7.7 million.
“In the five years we have conducted this study, we have continued to see an increase in the cost to businesses for suffering a data breach,” said Dr. Larry Ponemon, chairman and founder of The Ponemon Institute. “With a variety of threat vectors to contend with, companies must proactively implement policies and technologies that mitigate the risk of facing a costly breach.”
The Ponemon Institute looked at a sample of 58 U.S. companies with at least 1,000 connections to its computer network and a global sample of 252 companies based in the U.S., U.K. Germany, Australia, Japan, Russia and Brazil. The study examined the total business cost of responding to cybercrime incidents, which includes detection, notification, recovery, investigation and incident-response management as well as additional costs from, "impact of lost or diminished customer trust and confidence, measured by customer churn or turnover rates."
Hopefully this study can further encourage big corporations to tighten their security as the costs of a breach are immense and the consequences far reaching. Companies end up paying not just in lost sales or reduced brand integrity, but also in complementary credit monitoring services to help protect impacted customers against identity theft.
“As breaches are becoming all too commonplace, U.S. businesses can’t afford to ignore protecting the valuable, sensitive data they have been entrusted with,” said Phillip Dunkelberger, president and CEO of PGP Corporation. “Our study with the Ponemon Institute continues to demonstrate that companies whose data is not protected are not only facing expensive direct costs from cleaning up a data breach, but also a loss in customer confidence that has long lasting ramifications.”
As we wait for companies to guard our information more securely, don't forget that you can do a few things to protect yourself: avoid oversharing on social media, store personal documents in secure locations, shred sensitive records before throwing them away, and closely monitor your credit files and bank and credit card statements for suspicious activity.