When planning the annual security budget for your office, many expenses make the list such as security cameras, FOB key entry and a new alarm system, but what about a different type of security threat? We’re talking about your business’s cyber security. Cyber security, like traditional security, is a necessary precaution to take in order to best protect your company, assets, information and staff. If there is no real form of protection or prevention, the costs of a data breach can be insurmountable.
Ponemon Institute recently partnered with IBM and released a study on the true costs of data breaches in the United States. Here are some of the most important points from the study for business owners to consider:
- The cost of a data breach has reached an all-time high. In this year’s study, data breaches in the U.S. cost an average of $221 per compromised record. Of that cost, 65 percent goes towards indirect expenses, while the remaining 35 percent goes towards direct costs, such as technology upgrades and legal fees. Perhaps $221 does not intimidate you, but when dealing with hundreds if not thousands of records, the fees stack up very quickly. In 2015, the average cost of a data breach involving less than 10,000 records still added up to $4.9 million.
- Losing business presents a very real threat. One of the most significant financial burdens in the event of a data breach is lost business. A breach might indicate to customers or clients that their information is unsafe or that your company is unstable, and will result in them giving their business to a competitor. Businesses will need to take extra measures (and expenses) in order to regain trust.
- Industries including healthcare, financial services and life sciences have much more expensive data breaches. Because these types of companies deal with social security numbers, financial and health records, and some of the most personal and private information, the threat of lost customers and business is significantly higher. The average cost is $355 per lost record.
The report did indicate that certain responses and preventative measures can lower the costs. Having an incident response team, encrypting files, employee training and comprehensive data loss prevention tools will all help to reduce the costs incurred during a data breach. Michael Bruemmer, vice president of Experian Data Breach Resolution Group, wrote in Security InfoWatch that keeping a keen eye on breach trends and forecasts is vital for the integrity of a company’s data. “Along with being a great way to make sense of the major security news we see every day, a key part of effective breach response is being able to anticipate the emerging threats and effectively integrate them into the incident response process,” he said.
If you are interested in beginning your data breach prevention plan today, call 816-781-3006.
