
- Image by elmindreda via Flickr
While data breach incidents are not acceptable at the first place, what is even more surprising is the level of expenditure made on them once an incident on these matters is reported. According to a study conducted by the Ponemon Institute and PGP Corp. on an average it costs organizations in the U.S. about $204 per data record. This number is more than double for the figures reported from U.K. where the cost of a lost record is $98 per record. Infact, United Kingdom’s statistics are the lowest in the list of studied countries.
The survey was conducted among more than 133 companies spread over five countries.
Overall, the following were the results from the studied countries:
- US was $204
- Germany at $177
- France at $119
- Australia at $114
- UK being the lowest with an average cost of a stolen record at $98.
The cause for costs
According to the reports, the reason for high costs was the existence of legislation. Apparently, the involvement of processes and procedures lead to rise in costs. Infact, in US it is now only that 46 states have introduced new laws for public disclosure of data breach incidents. The costs in U.S. were 43% higher than the global benchmark. Germany, where the laws have been recently introduced is also higher than the global average by 25%. In Australia, France and the UK, where data breach notification laws have not yet been introduced, costs were all below the average. This is why UK is at the bottom of the list with figures 45% below global average, since it does not have public disclosure procedures. That said, in the UK are required to notify the Information Commissioner’s Office when a data breach occurs.
According to Dr. Larry Ponemon, chairman and founder of The Ponemon Institute, “The over-arching conclusion from this study is the staggering impact that regulation has on escalating the cost of a data breach”. “The U.S. figures are testament to this and it’s clear that, as and when breach notification laws are introduced across the rest of the world, other countries will follow the same pattern and costs will rise.”
The impact of data breach
The after-effects of a data breach incident are hughe with ‘decrease in customer trust’ being the biggest threat. The bulk of these incurred data loss expenses (44%) were attributed to the cost of lost business which reflects the added expense of consumer churn. It also creates difficulty of attracting new customers in the wake of negative publicity. E.g. in the US the percentage caused by lost businesses was 66%.
Organisations which suffered a data loss incident due to malicious & criminal activities also incurred higher costs. The organization in France witnessed the the greatest negative impact. The report advises the organization to take a more proactive approach to protecting their data from theft in order to reduce costs.
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- Data Breach Costs Top $200 Per Customer Record (it.slashdot.org)
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