Data breach costs hit record high

CHENNAI: Cost of data breach is hurting organisations significantly, shows a recent report by IBM and Ponemon Institute. Companies are incurring Rs 4,210 per employee as compared to Rs 3,704 last year, according to the 2017 Cost of Data Breach Study.

The average total organizational cost of data breach increased by 12.3% to Rs 11 crore from Rs 9.7 crore. "The study has put a number, not to the financial loss incurred by companies but the cost of managing a breach. It is a stark reminder that security is no longer something that can be brushed away. Corporates need to have a security plan and budget allocation for managing data breaches," said Kartik Shahani, integrated security leader, IBM ISA.

The report identified malicious or criminal attacks as the most common root cause of a data breach with 41% of companies experiencing this. As high as 33% attributed a breach due to system glitches, while 26% involved employee or contractor negligence. "Organizations struggle to identify true costs related to a cyber security breach. On one hand, there are obvious costs related to conducting an investigation, remedial measures for a long-term fix, regulatory compliance (including penalties) and brand reputation issues. However, today companies have to factor in indirect costs like impact on continuing operations and integrated value chain, loss of customers, increase in cyber risk premiums (if taken), loss of intellectual property and some times credit ratings. Both costs need to considered while deciding on the investment to be made to create an optimally secure environment," said Pankit Desai, founder and CEO, SEQURETEK, a security company.

With companies increasingly shifting to cloud, Shahani of IBM adds that it is imperative for corporates to have cloud technology which offers cognitive capabilities to detect anomalies.

An improvement from last year was seen in the time companies took to detect and contain breaches. While companies took 177 days to detect and 83 days to contain a breach earlier, the study recorded a slightly shorter time-frame—170 days and 72 days respectively this year. "If the mean time to identify a breach was less than 100 days, the average cost to identify was Rs 8.5 crore vis-a-vis Rs 13.5 crore if it took over 100 days.