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IBM REPORT: COST OF A DATA BREACH HITS RECORD HIGH DURING PANDEMIC
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News provided by
IBM
Jul 28, 2021, 00:01 ET
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* Data breaches cost surveyed companies $4.24 million per incident on average;
highest in 17-year report history
* Adoption of AI, hybrid cloud, and zero trust approach lowered data breach
costs
CAMBRIDGE, Mass., July 28, 2021 /PRNewswire/ -- IBM (NYSE: IBM) Security today
announced the results of a global study which found that data breaches now cost
surveyed companies $4.24 million per incident on average – the highest cost in
the 17-year history of the report. Based on in-depth analysis of real-world data
breaches experienced by over 500 organizations, the study suggests that security
incidents became more costly and harder to contain due to drastic operational
shifts during the pandemic, with costs rising 10% compared to the prior year.
Continue Reading
Data Breaches costs hit a record high during the pandemic (Source: IBM Security
& Ponemon Institute)
Companies who implemented a Zero Trust security approach saved millions on the
cost of a data breach (Source: IBM Security & Ponemon Institute)
Compromised credentials were a leading cause of data breaches (Source: IBM
Security & Ponemon Institute)
Businesses were forced to quickly adapt their technology approaches last year,
with many companies encouraging or requiring employees to work from home, and
60% of organizations moving further into cloud-based activities during the
pandemic.1 The new findings released today suggest that security may have lagged
behind these rapid IT changes, hindering organizations' ability to respond to
data breaches.
The annual Cost of a Data Breach Report, conducted by Ponemon Institute and
sponsored and analyzed by IBM Security, identified the following trends amongst
the organizations studied:
* Remote work impact: The rapid shift to remote operations during the pandemic
appears to have led to more expensive data breaches. Breaches cost over $1
million more on average when remote work was indicated as a factor in the
event, compared to those in this group without this factor ($4.96 vs. $3.89
million.)2
* Healthcare breach costs surged: Industries that faced huge operational
changes during the pandemic (healthcare, retail, hospitality, and consumer
manufacturing/distribution) also experienced a substantial increase in data
breach costs year over year. Healthcare breaches cost the most by far, at
$9.23 million per incident – a $2 million increase over the previous year.
* Compromised credentials led to compromised data: Stolen user credentials were
the most common root cause of breaches in the study. At the same time,
customer personal data (such as name, email, password) was the most common
type of information exposed in data breaches – with 44% of breaches including
this type of data. The combination of these factors could cause a spiral
effect, with breaches of username/passwords providing attackers with leverage
for additional future data breaches.
* Modern approaches reduced costs: The adoption of AI, security analytics, and
encryption were the top three mitigating factors shown to reduce the cost of
a breach, saving companies between $1.25 million and $1.49 million compared
to those who did not have significant usage of these tools. For cloud-based
data breaches studied, organizations that had implemented a hybrid cloud
approach had lower data breach costs ($3.61m) than those who had a primarily
public cloud ($4.80m) or primarily private cloud approach ($4.55m).
"Higher data breach costs are yet another added expense for businesses in the
wake of rapid technology shifts during the pandemic," said Chris McCurdy, Vice
President and General Manager, IBM Security. "While data breach costs reached a
record high over the past year, the report also showed positive signs about the
impact of modern security tactics, such as AI, automation and the adoption of a
zero trust approach – which may pay off in reducing the cost of these incidents
further down the line."
Impact of Remote Work and Shift to Cloud on Data Breaches
With society leaning more heavily on digital interactions during the pandemic,
companies embraced remote work and cloud as they shifted to accommodate this
increasingly online world. The report found that these factors had a significant
impact on data breach response. Nearly 20% of organizations studied reported
that remote work was a factor in the data breach, and these breaches ended up
costing companies $4.96 million (nearly 15% more than the average breach).
Companies in the study that experienced a breach during a cloud migration
project had 18.8% higher cost than average. However, the study also found that
those who were further along in their overall cloud modernization strategy
("mature" stage) were able to detect and respond to incidents more effectively –
77 days faster on average than those who were in early-stage adoption.
Additionally, for cloud-based data breaches studied, companies that had
implemented a hybrid cloud approach had lower data breach costs ($3.61m) than
those who had a primarily public cloud ($4.80m) or primarily private cloud
approach ($4.55m).
Compromised Credentials a Growing Risk
The report also shed light on a growing problem in which consumer data
(including credentials) is being compromised in data breaches, which can then be
used to propagate further attacks. With 82% of individuals surveyed admitting
they reuse passwords across accounts, compromised credentials represent both a
leading cause and effect of data breaches, creating a compounding risk for
businesses.
* Personal Data Exposed: Nearly half (44%) of the breaches analyzed exposed
customer personal data, such as name, email, password, or even healthcare
data – representing the most common type of breached record in the report.
* Customer PII Most Costly: The loss of customer personal identifiable
information (PII) was also the most expensive compared to other types of data
($180 per lost or stolen record vs $161 for overall per record average).
* Most Common Attack Method: Compromised user credentials were the most common
method used as an entry point by attackers, representing 20% of breaches
studied.
* Longer to Detect & Contain: Breaches resulting from compromised credentials
took the longest to detect – taking an average of 250 days to identify (vs.
212 for the average breach.)
Businesses That Modernized Had Lower Breach Costs
While certain IT shifts during the pandemic increased data breach costs,
organizations who said they did not implement any digital transformation
projects in order to modernize their business operations during the pandemic
actually incurred higher data breach costs. The cost of a breach was $750,000
higher than average at organizations that had not undergone any digital
transformation due to COVID-19 (16.6% higher than the average).
Companies studied that adopted a zero trust security approach were better
positioned to deal with data breaches. This approach operates on the assumption
that user identities or the network itself may already be compromised, and
instead relies on AI and analytics to continuously validate connections between
users, data and resources. Organizations with a mature zero trust strategy had
an average data breach cost of $3.28 million – which was $1.76 million lower
than those who had not deployed this approach at all.
The report also found that more companies were deploying security automation
compared to prior years, leading to significant cost savings. Around 65% of
companies surveyed reported they were partially or fully deploying automation
within their security environments, compared to 52% two years ago. Those
organizations with a "fully deployed" security automation strategy had an
average breach cost of $2.90 million – whereas those with no automation
experienced more than double that cost at $6.71 million.
Investments in incident response teams and plans also reduced data breach costs
amongst those studied. Companies with an incident response team that also tested
their incident response plan had an average breach cost of $3.25 million, while
those that had neither in place experienced an average cost of $5.71 million
(representing a 54.9% difference.)
Additional findings from the 2021 report include:
* Time to respond: The average time to detect and contain a data breach was 287
days (212 to detect, 75 to contain) – which is one week longer than the prior
year report.
* Mega breaches: Average cost of a mega breach was $401 million, for breaches
between 50 million and 65 million records.3 This is nearly 100x more
expensive than the majority of breaches studied in the report (which ranged
from 1,000-100,000 records.)
* By industry: Data breaches in healthcare were most expensive by industry
($9.23m), followed by the financial sector ($5.72m) and pharmaceuticals
($5.04m). While lower in overall costs, retail, media, hospitality and public
sector experienced a large increase in costs vs. the prior year.
* By country/region: The US had the most expensive data breaches at $9.05
million per incident, followed by Middle East ($6.93m) and Canada ($5.4m).
Methodology and Additional Data Breach Statistics
The 2021 Cost of a Data Breach Report from IBM Security and Ponemon Institute is
based on in-depth analysis of real-world data breaches of 100,000 records or
less, experienced by over 500 organizations worldwide between May 2020 and March
2021. The report takes into account hundreds of cost factors involved in data
breach incidents, from legal, regulatory and technical activities to loss of
brand equity, customers, and employee productivity.
To download a copy of the 2021 Cost of a Data Breach Report, please visit:
ibm.com/databreach
Sign up for the 2021 Cost of a Data Breach Report webinar on August 18 at 11:00
AM ET, here: ibm.biz/CODBwebinar
About IBM Security
IBM Security offers one of the most advanced and integrated portfolios of
enterprise security products and services. The portfolio, supported by
world-renowned IBM Security X-Force® research, enables organizations to
effectively manage risk and defend against emerging threats. IBM operates one of
the world's broadest security research, development and delivery organizations,
monitors 150 billion+ security events per day in more than 130 countries, and
has been granted more than 10,000 security patents worldwide. For more
information, please check www.ibm.com/security, follow @IBMSecurity on Twitter
or visit the IBM Security Intelligence blog.
Media Contact:
Cassy Lalan
Media Relations, IBM Security
319-230-2232 (m)
cllalan@us.ibm.com
1 IBM Institute for Business Value: COVID-19 and the future of business
2 Average cost of $4.96 million for those surveyed where remote work was a
factor vs. $3.89 million when remote work was not a factor
3 The 2021 Cost of a Data Breach Report examines the cost of a mega breach based
on a separate analysis of a specific sample involving loss or theft of one
million records or more. The mega breach sample is not included in the overall
average data breach report calculations, which examines data breaches ranging
from 1,000-100,000 records.
SOURCE IBM
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