Crime might pay for those bold enough to do it, but that doesn’t mean everyone should. Hackers likely don’t take into account the fact that they are costing the world countless millions of dollars in damage only to further their own gain, and their influence can have far-reaching effects on people all over the world, let alone your business.
Unfortunately, it is rather difficult to put a number on how much cash cybercrime actually costs businesses, and this can happen for a number of reasons. There are many variables that need to be taken into account when trying to figure out how much a data breach can cost your company.
Counting the Costs
If you try to use reports and surveys to get an idea for how much money is lost due to hackers, you’re only going to wind up with a headache. All you can find are guesstimates, and different definitions about what the cost of hacking even means. In the Ponemon Institute’s study titled 2013 Cost of Data Breach Study: Global Analysis, the institution goes into detail about why and how data breaches occur in many different countries around the world. It also details the business costs associated with data breaches, such as detection and investigation costs, as well as the aftermath of the breach and how much money would be lost in fines.
Factors Which Affect Data Breach Costs
Obviously, there are some factors which lead to the statistics that most companies feel represent their data breach costs. However, some companies experience minimal cost from a data breach due to quick action.
- Does the company have an incident plan? This factor details whether the company has an action plan in the event of a data breach. According to the report, U.S. companies that use an incident response plan can save up to $42/capita just by having one in place.
- Does the company have a strong security stance? The second factor had to do with how effective the security measures the companies had in place were. This factor was measured by administering a test, which provided a Security Effectiveness Score (SES). Those with a high SES saved up to $34/capita on data breach costs.
- Does the company have a chief information security officer (CISO)? Putting someone in charge of keeping your information secure can benefit your company and allow this person to concentrate on that one specific task. Having a CISO on board decreased the cost of data breaches by $23/capita.
- Has data been lost by a third-party error? A lot of the time, it’s not even the company’s fault. Organizations associated with the company can make mistakes too, like technology vendors and business partners. $43/capita per record is estimated to have been lost to data breaches by third-parties in 2013.
- How quickly were the victims notified? In some countries, there are regulations put into place that dictate a timely notification of the victims of data breaches. However, if the victims are notified too soon, the total costs are higher. In the U.S. alone, a quick notification added as much as $37/capita per record.
- Were lost or stolen devices involved with the data breach? If there are lost or stolen devices involved with the data breach, costs were increased. Though the U.K. topped this list at $15/capita in costs, the U.S. suffered a $10/capita loss per record.
- Were consultants engaged to help fix the problem? Organizations that hired outside consultants for the data breach resulted in savings of up to $13/capita per record. Not only did this save them money, but it also helped them contain and resolve the problem effectively and efficiently.
The bottom line is that you don’t want to be caught off guard during a data breach. All of these factors that affect data breach costs could have been limited with proper preparation. Take action today by calling Michell Consulting Group at 305.592.5433 ext. 2601. We’ll make sure that you are prepared to meet a data breach head-on, and we’ll do our utmost to prevent it in the first place. Don’t become just another statistic – let Michell Consulting Group keep your company safe.