The cost of data breaches soar due to #wfh
Posted on 23 September, 2021
IBM Security’s latest cost of a data breach report found that data breaches now cost $4.24 million per incident on average—the highest cost in the 17-year history of the report.
According to IBM, based on analysis of real-world data breaches experienced by over 500 organisations around the world, the study suggests that security incidents became more costly and harder to contain due to drastic operational shifts during the pandemic, with costs rising 10 per cent compared to the prior year.
As we know businesses were forced to quickly adapt their technology approaches last year, with many companies encouraging or requiring employees to work from home, and 60 per cent of organisations moving further into cloud-based activities during the pandemic. The new findings suggest that security may have lagged behind these rapid IT changes, hindering the ability of businesses to respond to data breaches.
The report identified the following key trends:
- Remote work impact: The rapid shift to remote operations during the pandemic appears to have led to more expensive data breaches. Breaches cost over $1 million more on average when remote work was indicated as a factor in the event, compared to those in this group without this factor ($4.96 versus $3.89 million.)
- Healthcare breach costs surged: Industries that faced huge operational changes during the pandemic (healthcare, retail, hospitality, and consumer manufacturing/distribution) also experienced a substantial increase in data breach costs year over year. Healthcare breaches cost the most by far, at $9.23 million per incident a $2 million increase over the previous year.
- Compromised credentials led to compromised data: Stolen user credentials were the most common root cause of breaches in the study. At the same time, customer personal data (such as name, email, password) was the most common type of information exposed in data breaches—with 44 per cent of breaches including this type of data. The combination of these factors could cause a spiral effect, with breaches of username/passwords providing attackers with leverage for additional future data breaches.
- Modern approaches reduced costs: The adoption of AI, security analytics, and encryption were the top three mitigating factors shown to reduce the cost of a breach, saving companies between $1.25 million and $1.49 million compared to those who did not have significant usage of these tools. For cloud-based data breaches studied, organisations that had implemented a hybrid cloud approach had lower data breach costs ($3.61 million) than those who had a primarily public cloud ($4.80 million) or primarily private cloud approach ($4.55 million).
As the cost of data breaches continues to soar once again it is critical for organisations to understand the responsibilities of data ownership and management.