Written by: Guest | Best Company Editorial Team
Last Updated: February 24th, 2020
Guest Post by Kerry Harrison
It seems that a day does not go by without news of a data breach. From small local businesses to the big players, like Yahoo and Home Depot, no one is immune to the threat.
To understand just how damaging a data breach could be, it is important to look at how much this could cost your company. And, of course, the costs aren’t just monetary.
In this article, we are going to take a look at some of the statistics that have been gathered regarding the true cost of a data breach, as well as assessing the impact such a scenario could have on the future of your company.
The true cost of a data breach
There have been a number of studies regarding the cost of a data breach. However, most would agree that one reliable resource is the “Cost of a Data Breach” study, which is conducted by the Ponemon Institute and IBM.
The 2018 survey is the 13th addition of this annual report. It revealed the average worldwide cost of a data breach is $3.86 million, representing a 6.4 percent increase on the year before. In the United States specifically, the average data breach is much higher than the worldwide average, coming in at around $7.9 million.
The survey also revealed that there has been an increase in the average cost per each stolen or lost record that contained confidential and sensitive information. This has increased to $148 per record, which is a 4.8 percent increase when compared with 2017.
The fact that the average data breach cost in the world is found in the United States is a reason to be concerned. The U.S. took this title by a very wide margin. The second most expensive country in terms of data breaches is Canada, with an average of $4.74 million per incident. This was followed by Germany ($4.67 million), France ($4.227 million), and the United Kingdom ($3.68 million).
There has also been an interesting study conducted by Kaspersky, which delved into how these data breach expenses are made up. The survey, which involved interviewing over 6,000 employees working across the globe for various businesses, concluded that the biggest expense in the event of a data breach is spending money on the emergency improvement of software and infrastructure. The average cost of this is $193,000, which represents a one-and-a-half times increase on the year before.
The second biggest expense for businesses is reputational damage. The average spent on this is $180,000, and this money can be attributed to increased insurance premiums and damaged credit ratings.
Of course, this merely scratches the surface of the different costs. You then have to factor in the fines that are often imposed on firms that have been deemed irresponsible for failing to protect their customers’ data. Aside from this, large sums of money are also spent on security-awareness training.
The impact a data breach will have
As mentioned in the introduction, while the monetary impact of a data breach is huge, you will also suffer in terms of reputational damage too.
Trust is incredibly difficult to build in any relationship, especially that of client and business. If you break your trust through giving away your client’s private data, this is going to be incredibly difficult to repair.
It is going to take significant time and money, and many businesses are never able to come back from this. When you search your company’s name online, the news of the breach will flood the web. Counteracting this can be almost impossible.
Spending money to save money
Needless to say, you will want to make sure that these figures do not become a reality by protecting your business and preventing a data breach. This involves spending a bit of money to save your company millions in the future.
Here are some essential steps to take to prevent a data breach from happening at your business:
- Start with all of the basics, such as a secure firewall and VPN. Avast VPN is a recommended choice. This will work to mask your IP address.
- Enforce restrictive data permissions.
- Classify your business data.
- Provide employees with training. Did you know that insider attacks are the most common? Typically, they aren’t malicious, yet occur due to a lack of knowledge regarding safe practices.
- Update your software whenever prompted.
- Enforce two-factor authentication.
- Back up your business’ data with a secure provider.
Hopefully, you now have a better understanding regarding the true cost of a data breach. One thing is for sure: sums of money like this aren’t something you can simply turn a blind eye to. Many businesses have had to close their doors for good because of a data security incident. To make sure you don’t fall into this category, use the advice that has been provided above.
Kerry Harrison is a full-time freelance content writer, with a First Class Hons degree in Multimedia Journalism BA. She currently writes for VPN Geeks.