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Mega Breaches: Expensive in Terms of Both Dollars and Reputation
Megabreaches – security lapses that result in millions and millions of records being lost are becoming more common. There’s enough examples available now that studies are being conducted to determine just what went wrong.
IBM recently made a study of 11 recent megabreaches. Their definition of a megabreach was the loss of somewhere between one and fifty million records. The damage in terms of cost from one of these breaches ranged from $40 million to $350 million. Damages are often hard to totally account for. Publicity of the event, for example, can seriously impact the reputation of a company that is the victim of a large-scale incident.
Wendi Whitmore, global lead at IBM, said that “the truth is, there are many hidden expenses that must be taken into account, such as reputational damage, customer turnover and operational costs. Knowing where the costs lie, and how to reduce them, can help companies invest their resources more strategically and lower the huge financial risks at stake.”
The IBM study found that most of the large breaches were the result of intentional, malicious hacking. Often the attach is not discovered until far after the initial breach occurred. The average number of days until discovery is 197 days. Healthcare organizations had the highest cost per record in responding to and contain the breach.
Whitmore said that “knowing where the costs lie, and how to reduce them, can help companies invest their resources more strategically and lower the huge financial risks at stake.”
