IBM Security surveyed the financial impact of data breaches, based on an in-depth analysis of data breaches experienced by over 500 organizations worldwide. The 2020 Cost of a Data Breach Report that was conducted by the Ponemon Institute is based on in-depth interviews with more than 3,200 security professionals in organizations that suffered a data breach over the past year.
Half of the remote workers don’t have new guidelines
The survey indicates that these incidents cost companies studied $3.86 million per breach on average, and that compromised employee accounts were the most expensive root cause. Another important finding is that 80% of these incidents resulted in the exposure of customers’ personally identifiable information (PII).
The survey is important to show the effect of COVID-19 pandemic on data breaches. Companies are increasingly accessing sensitive data via new remote work and cloud-based business operations because of the growing number of remote workers during the COVID-10 outbreak. A separate IBM study found that over half of surveyed employees new to working from home due to the pandemic have not been provided with new guidelines on how to handle customer PII, despite the changing risk models associated with this shift.
Over 50 million records cost $392 million
Some of the top findings from this year’s report include:
- Smart Tech Slashes Breach Costs in Half: Companies studied who had fully deployed security automation technologies experienced less than half the data breach costs compared to those who didn’t have these tools deployed – $2.45 million vs. $6.03 million on average.
- Paying a Premium for Compromised Credentials: In incidents where attackers accessed corporate networks through the use of stolen or compromised credentials, studied businesses saw nearly $1 million higher data breach costs compared to the global average – reaching $4.77 million per data breach. Exploiting third-party vulnerabilities was the second costliest root cause of malicious breaches ($4.5 million) for this group.
- Mega Breach Costs Soar by the Millions: Breaches wherein over 50 million records were compromised saw costs jump to $392 million from $388 million the previous year. Breaches, where 40 to 50 million records were exposed cost, studied companies $364 million on average, a cost increase of $19 million compared to the 2019 report.
- Nation-State Attacks – The Most Damaging Breaches: Data breaches believed to originate from nation-state attacks were the costliest, compared to other threat actors examined in the report. State-sponsored attacks averaged $4.43 million in data breach costs, surpassing both financially motivated cybercriminals and hacktivists.
Wendi Whitmore, Vice President, IBM X-Force Threat Intelligence, said,
“When it comes to businesses’ ability to mitigate the impact of a data breach, we’re beginning to see a clear advantage held by companies that have invested in automated technologies. At a time when businesses are expanding their digital footprint at an accelerated pace and the security industry’s talent shortage persists, teams can be overwhelmed securing more devices, systems and data. Security automation can help resolve this burden, not only supporting a faster breach response but a more cost-efficient one as well.”
The most common causes of a malicious breach for companies in the report, representing nearly 40% of malicious incidents were stolen or compromised credentials and cloud misconfiguration.
The 2020 report revealed that attackers used cloud misconfigurations to breach networks nearly 20% of the time, increasing breach costs by more than half a million dollars to $4.41 million on average – making it the third most expensive initial infection vector examined in the report.
Some additional findings from this year’s report include:
- Remote Work Risk Will Have a Cost: With hybrid work models creating less controlled environments, the report found that 70% of companies studied that adopted telework amid the pandemic expect it will exacerbate data breach costs.
- CISOs Faulted for Breaches, Despite Limited Decision-Making Power: Forty-six percent of respondents said the CISO/CSO is ultimately held responsible for the breach, despite only 27% stating they CISO/CSO is the security policy and technology decision-maker. The report found that appointing a CISO was associated with $145,000 cost savings versus the average cost of a breach.
- Majority of Cyber Insured Businesses Use Claims for Third-Party Fees: The report found that breaches at studied organizations with cyber insurance cost on average nearly $200,000 less than the global average of $3.86 million. In fact, of these organizations that used their cyber insurance, 51% applied it to cover third-party consulting fees and legal services, while 36% of organizations used it for victim restitution costs. Only 10% used claims to cover the cost of ransomware or extortion.
- Regional & Industry Insights: While studied companies in the U.S. continued to experience the highest data breach costs in the world, at $8.64 million on average, those studied in Scandinavia experienced the biggest year over year increase in breach costs, observing a nearly 13% rise. Responding healthcare companies continued to incur the highest average breach costs at $7.13 million — an over 10% increase compared to the 2019 study.
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