Security Intelligence, a cyber security organization, said in its 2019 Cost of Data Breach Report that the global average cost of a data breach has hit $3.92 million, which represents a 1.5% increase over 2018. More shocking, though, is that in the United States, the average total cost of a data breach is $8.19 million.
One important aspect of how much a data breach will actually cost you is time to recovery. The report finds that the amount of time involved in recognizing a breach and containing it, which Security Intelligence calls data breach life cycle, is 279 days. That’s nearly 5% longer than what they found for the 2018 life cycle. The more time an organization is in the data breach life cycle, the more costly the breach.
Among the most difficult to contain are criminal attacks and malicious attacks, which represent around 51% of all breaches. Almost 25% of breaches are related to system glitches and 24% of breaches are related to human error.
The Long Haul Costs
New in the Report from Security Intelligence is the fact that for the first time, they surveyed the same companies in 2019 as they did in 2018. They looked at several years’ worth of data to determine when the costs of a breach were incurred. They found that for some companies, most of the costs occur in the first year of the breach, but around one-third of the costs are managed a year after the breach.
How costs are managed differs between organizations in a low regulatory environment versus those in a high regulatory environment. For example, the costs between each environment closely mirror the other up until 21 months following the breach, at which point organizations in the low regulatory environment flatten out, but organizations in the high regulatory environment see a spike where they’re managing 15% of the total cost at 24 months and then another 16% beyond the two year marker.
A factor that creates such a long “tail” of data breach expense is related to high legal and regulatory costs, which can occur through fines or through class action lawsuits, which are common in health care and financial services.
When data is breached, there are a number of factors that can determine what the total cost will be. Breach life cycle has already been mentioned, but you also have to account for the size of the breach (how much data was actually stolen) and how many customers it impacted. A damaged reputation can lead to customer turnover, which certainly has its own cost.
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