A new Canadian study from the Rotman School of Management reveals a major increase in annual losses related to Information Technology (IT) security breaches. According to this study, which surveyed more than 600 IT security professionals across the country, the costs associated with security breaches include:

• IT security breaches cost the average Canadian organization an estimated $834,000 in 2009 – a 97 per cent increase from the $423,000 reported by the study last year.
• Similarly, the average number of reported IT security breaches also increased 276 per cent to 11.3 per organization in 2009 – compared with an average of three in 2008.

While every type of organization incurred an increase in breach costs during 2009, the increases were different across sectors:

• Government organizations more than tripled their average annual cost of breaches to $1,000,000 in 2009, up from $321,000 in 2008.
• Private companies more than doubled their cost of breaches to $807,000 up from $294,000 in 2008.
• Publicly traded companies reported a moderate increase of only six per cent year-over-year.

These alarming numbers bring with them a silver lining, as the increase in the number of reported cases could be attributed in part to higher detection levels due to compliance regulations.  At the same time, it is a shame that IT departments are not adopting data encryption software like they should be.  Even with increased reporting, proper use of tools like Alertsec could have led to a decrease is losses due to security breaches.

The study highlighted the value of IT investments in security as the top-performing respondents (those without breaches) spent at least 10 per cent of their IT expenditures on security, with the average security budget was seven per cent of the total IT spending. The study reports that Canadian organizations are finding it difficult to improve their security posture within the current economic climate – but the cost of ownership for hosted encryption services is a drop in the bucket for the millions that are spent on security.

With a 56-per-cent jump in occurrences of laptop or mobile hardware devices being stolen in Canada alone, encrypting files on laptops should be so obvious a solution!  File encryption is not a new technology – it’s an established technology. However, too many organization weigh security and convenience and land on the convenience side – not realizing how simple hosted encryption can be!

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