Pricey Business! Data breach incidents cost companies US$204 per compromised customer record in 2009, compared to US$202 in 2008, according to a US Cost of a Data Breach Study by the Ponemon Institute.
The average cost per incident cost each firm close to US$7 million. The study found that despite an overall drop in the number of reported breaches (498 in 2009 vs 657 in 2008, according to the Identity Theft Resource Centre), the average total per-incident costs in 2009 were US$6.75 million, compared to an average per-incident cost of US$6.65 million in 2008.
Negligent insider breaches have decreased in number and cost most likely resulting from training and awareness programs having a positive effect on employees’ sensitivity and awareness about the protection of personal information.
Additionally, 58pc have expanded their use of encryption up from 44pc last year. Organisations are spending more on legal defence costs, which can be attributed to increasing fears of successful class actions resulting from customer, consumer or employee data loss.
How much did you say?
The most expensive data breach event included in this year’s study cost a company nearly $31 million to resolve. The least expensive total cost of data breach for a company included in the study was $750,000.
And the duration?
“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.”
So does it stack up?
The US Cost of a Data Breach Study was derived from a detailed analysis of 45 data breach cases with a range of about 5,000 to 101,000 records that were affected. The study found that there is a positive correlation between the number of records lost and the cost of an incident.
Companies analysed were from 15 different industries, including financial, retail, healthcare, services, education, technology, manufacturing, transportation, consumer, hotels and leisure, entertainment, marketing, pharmaceutical, communications, research, energy and defence.
Cross-posted from the VentiBlog