Cost of a data breach: $4 million. Benefits of responding quickly: Priceless.

That's $158 per compromised record, in case you're keeping track

The bad news is that data breaches are becoming ever more common. The worse news is that the cost they represent for companies is going through the roof.

Those are two conclusions from a study released Wednesday by IBM Security and the Ponemon Institute, which found that the average cost of a data breach has grown to US $4 million. That's a hefty jump compared with last year's $3.79 million, and it represents an increase of almost 30 percent since 2013.

"Data breaches are now a consistent 'cost of doing business' in the cybercrime era," said Larry Ponemon, chairman and founder of the Ponemon Institute, a research firm focused on security. "The evidence shows that this is a permanent cost organizations need to be prepared to deal with and incorporate in their data protection strategies.”

The annual Cost of a Data Breach study examines both direct and indirect costs to companies in dealing with a single data breach incident. Based on in-depth interviews with nearly 400 companies across the globe, the study includes costs associated with breach response activities as well as reputational damage and the cost of lost business.

This year's data uncovered a 64 percent increase in reported security incidents between 2014 and 2015. Meanwhile, the study found that companies now lose some $158 per compromised record. In highly regulated industries like healthcare, the damage is even worse, reaching $355 per record.

Incident forensics, communications, legal expenditures, and regulatory mandates account for the bulk of that cost.

IBM Security, which sponsored the survey, obviously has an interest in the results. At the same time, it's hard to argue with its recommendations, which include a coordinated and automated response plan along with access to the right resources and skills.

Having an incident response team can reduce the cost of a data breach by nearly $400,000 on average, the study's authors said. Moreover, speed makes a difference. The study found that the average time to identify a breach was 201 days; the average time to contain it was 70 days.

In general, breaches that were identified in fewer than 100 days cost companies an average of $3.23 million, whereas those found after the 100-day mark cost $4.38 million.

Companies with business continuity management (BCM) processes in place were ahead there, discovering breaches 52 days earlier and containing them 36 days faster than companies without, according to the study's authors.

Join the CSO newsletter!

Error: Please check your email address.

Tags IBM

More about

Show Comments

Featured Whitepapers

Editor's Recommendations

Solution Centres

Stories by Katherine Noyes

Latest Videos

  • 150x50

    CSO Webinar: The Human Factor - Your people are your biggest security weakness

    ​Speakers: David Lacey, Researcher and former CISO Royal Mail David Turner - Global Risk Management Expert Mark Guntrip - Group Manager, Email Protection, Proofpoint

    Play Video

  • 150x50

    CSO Webinar: Current ransomware defences are failing – but machine learning can drive a more proactive solution

    Speakers • Ty Miller, Director, Threat Intelligence • Mark Gregory, Leader, Network Engineering Research Group, RMIT • Jeff Lanza, Retired FBI Agent (USA) • Andy Solterbeck, VP Asia Pacific, Cylance • David Braue, CSO MC/Moderator What to expect: ​Hear from industry experts on the local and global ransomware threat landscape. Explore a new approach to dealing with ransomware using machine-learning techniques and by thinking about the problem in a fundamentally different way. Apply techniques for gathering insight into ransomware behaviour and find out what elements must go into a truly effective ransomware defence. Get a first-hand look at how ransomware actually works in practice, and how machine-learning techniques can pick up on its activities long before your employees do.

    Play Video

  • 150x50

    CSO Webinar: Get real about metadata to avoid a false sense of security

    Speakers: • Anthony Caruana – CSO MC and moderator • Ian Farquhar, Worldwide Virtual Security Team Lead, Gigamon • John Lindsay, Former CTO, iiNet • Skeeve Stevens, Futurist, Future Sumo • David Vaile - Vice chair of APF, Co-Convenor of the Cyberspace Law And Policy Community, UNSW Law Faculty This webinar covers: - A 101 on metadata - what it is and how to use it - Insight into a typical attack, what happens and what we would find when looking into the metadata - How to collect metadata, use this to detect attacks and get greater insight into how you can use this to protect your organisation - Learn how much raw data and metadata to retain and how long for - Get a reality check on how you're using your metadata and if this is enough to secure your organisation

    Play Video

  • 150x50

    CSO Webinar: How banking trojans work and how you can stop them

    CSO Webinar: How banking trojans work and how you can stop them Featuring: • John Baird, Director of Global Technology Production, Deutsche Bank • Samantha Macleod, GM Cyber Security, ME Bank • Sherrod DeGrippo, Director of Emerging Threats, Proofpoint (USA)

    Play Video

  • 150x50

    IDG Live Webinar:The right collaboration strategy will help your business take flight

    Speakers - Mike Harris, Engineering Services Manager, Jetstar - Christopher Johnson, IT Director APAC, 20th Century Fox - Brent Maxwell, Director of Information Systems, THE ICONIC - IDG MC/Moderator Anthony Caruana

    Play Video

More videos

Blog Posts

Market Place