Data breach costs rose by 15%; India in 'least expensive' zone

Total cost of a data breach increased 15 percent in 2013 to $3.5 million, according to a study released by Ponemon Institute. The IBM-sponsored study of 314 companies spanning 10 countries also found that the cost incurred for each lost or stolen record containing sensitive and confidential information increased more than nine percent to a consolidated average of $145.

According to the study, the most costly breaches occurred in the U.S. and Germany at $201 and $195 per compromised record, respectively, while the least expensive data breaches were in India and Brazil at $51 and $70, respectively.
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Countries in the Arabian region and Germany had more data breaches caused by malicious or criminal attacks. India had the most data breaches caused by a system glitch or business process failure. Human error was most often the cause in the UK and Brazil.

The most costly data breaches were those caused by malicious and criminal attacks. The U.S. and Germany paid the most at $246 and $215 per compromised record, respectively. These types of data breaches were least costly for companies in India and Brazil at $60 and $77 per compromised record, respectively, the report said.

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“Clearly, malicious insiders and criminal attacks are a growing concern for businesses, especially when we consider how persistent data has become in the age of cloud and mobility,” said Kris Lovejoy, general manager, IBM Security Services Division. “A data breach can result in enormous damage to a business that goes way beyond the financials. At stake is customer loyalty and brand reputation.”

A strong security posture was critical to decreasing the cost of data breach. On average, companies that self-reported they had a strong security posture were able to reduce the cost by as much as $14 per record. The involvement of business continuity management reduced the cost of data breach by an average of almost $9 per record.

The appointment of a chief information security officer (CISO) to lead the data breach incident response team reduced the cost of a breach by more than $6.

The study found that only 38 percent of companies have a security strategy to protect its IT infrastructure. A higher percentage (45 percent) has a strategy to protect their information assets.

Malicious code and sustained probes have increased the most. Companies estimate that they will be dealing with an average of 17 malicious codes each month and 12 sustained probes each month. Unauthorised access incidents have mainly stayed the same and companies estimate they will be dealing with an average of 10 such incidents each month.