And what to do about them.
A major data loss event is one of the most detrimental things that can happen to a business. They’re not only costly, the side effects of such an incident are felt long after the loss occurs. Some businesses never recover and ones that do are left dealing with the consequences for years. Studies and reports that warn of the damaging effects flood the market but with so much information available, pulling out the must-necessary information can be difficult, especially for a business owner.
These five essential data loss statistics provide an overview of the costs of data loss and the most effective, cost-saving ways to respond.
The Average Cost of a Data Breach is $3.86 Million
That’s the average cost of a data breach across all businesses globally. Breaking it down further, the numbers get worse. For the healthcare industry, the cost averages at just over $7 million. For businesses just in the US, you’re facing a cost of $8.64 million. These numbers are concerning to say the least. The averages cover both the direct and indirect costs associated with a breach from identifying the breach event to recovery and downtime to the resulting lost business. While IT, security and business owners alike hope to avoid these costs altogether, the recent rise in cloud computing and remote work make the chances of a data loss event more likely. Fortunately, there’s a way to lower the cost from prevention to response.
The best defense against data loss or a data breach is to operate as if it’s going to happen. This requires assessing your enterprise data, identifying the weak points in your security systems and strengthening your data loss prevention strategy. Training employees on best data practices and having a response plan in place helps prevent loss and decreases the costs in the event of data loss.
Automated Data Loss Prevention Saves $3.58M per Breach
While the average cost of a data breach can cost a company almost $4 million, it doesn’t have to be. A data loss prevention plan not only helps avoid data loss, it lowers the recovery and response costs when data loss does occur. Companies that invested in proactive data loss prevention and response are less likely to experience a repeat data loss event and businesses with fully deployed security automation fared the best. Such companies reported spending less throughout the data breach lifecycle and saving more than others during the recovery period. These savings amount to almost the total average cost of a data breach altogether. Although breaches always have some financial consequence, data loss prevention plans significantly lower the financial impact of a breach when they do occur.
Organizations that wish to benefit from such savings need to not only have an automated security program, they must also regularly test and train officers in charge of incident response plans. Full deployment and readiness plays a large part in a company’s ability to fully protect themselves against the damaging effects of data loss yet only 40% of companies report a full deployment and regular testing of their systems.
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Downtime Costs Companies Up to $700,000 per Hour
When enterprise data is lost, companies are unable to return to work until the data is recovered. The employee downtime from the loss comes with a hefty price tag. For SMBs, an hour of downtime can cost up to $74,000. Large companies can lose up to $700,000 per hour. With breach containment taking an average of 73 days, the cost of downtime alone can cause a company to shutter its doors. To help your company lower these potential costs it’s important to consider a disaster recovery plan as much as a data loss prevention plan.
If your organization falls victim to a cybersecurity attack or even an accidental data loss event, a disaster recovery plan can help save on the financial losses from employee downtime and recovery costs. Disaster recovery plans provide quick relief through data retrieval and can help companies avoid paying costly ransoms if they’re subject to a ransomware attack. Data backup response strategies offer the largest savings to companies in terms of data loss. With a well-built disaster or incident response plan, a company suffering from a breach can save over $2 million in recovery costs.
Lost Business Accounts for 40% of Data Breach Costs
Businesses feel the damaging effects of a data loss incident long after the problem is solved. Organizations that fall victim to such events have to contend with a loss in customer and investor trust. These losses account for 40% of the cost of a data breach, or an average of $1.52 million per breach. Other than losing customer confidence, attracting new business becomes that much harder too. Businesses reported having to spend twice as much to gain new customers after suffering a data breach. The indirect after-costs of data loss are often so damaging to a business, a majority never recover.
Rebuilding the trust of customers and investors is crucial after a malicious data loss event. The best way to do this is to be transparent and forthcoming about the loss as quickly as possible. Depending on the size and impact of the event, a rebranding may be worth considering to renew the confidence of your customer base and business partners.
Internal Actors Are Responsible for 34% of Data Breaches
While external malicious actors are to blame for a majority of data breaches, over one-third of data breaches are attributed to internal actors. The motivations and reasoning behind this type of data loss varies. In some cases it’s simply an accident caused by the sloppy work of an employee. In other cases however, the internal actor could be a malicious insider threat. Fortunately preventing insider threats to data loss can be answered in the same way: endpoint data loss prevention software.
Employee monitoring programs are an example of such software. After being installed on a user’s or employee’s system, they provide data loss prevention through surveilling how data is being handled and respond accordingly if employee behavior is in violation of a company’s data security policies. This type of software tracks data in-motion rather than perform anomaly analysis on data at-rest and allows administrators to view suspicious or vulnerable employee behavior immediately.
Conclusion
Some argue that data breaches are inevitable for business owners. While the rise in cyberattacks may be proving this argument true, the high costs associated with a data loss event can be lowered and sometimes avoided altogether with a robust data loss prevention and disaster recovery plan. To experience the greatest savings possible companies must have a fully deployed automated security strategy supplemented by data loss prevention that monitors unauthorized employee behavior. Beyond preventative measures, businesses must also be prepared for the worst. In the event of a data breach or data loss event, a disaster recovery plan cuts down on the time it takes to respond and lowers the repair cost making it easier for companies to rebound after an incident. If data breaches are an inevitable part of running a business, prevention and preparation is crucial.
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