Data breaches are occurring more than ever in the United States and other parts of the world. Taking preventive measures, such as locking down your network, using security software, and creating strong passwords, can make it much harder for cybercriminals to infiltrate your business and access confidential information. However, despite your best efforts to prevent a data breach, your company might still experience one. This is partly due to the fact that data breaches are not always the result of cyberattacks; human error, system glitches, and malicious insiders can also cause them.
You can’t prevent a data breach from ever happening. But preparing for a data breach can significantly reduce the costs incurred from one. The 2021 Cost of a Data Breach Report outlines some of the top preparations for a data breach. Here are a few of them.
- Investing in security orchestration, automation and response (SOAR) to help improve detection and response times.
- Adopting a zero trust security model to help prevent unauthorized access to sensitive data.
- Using tools that help protect and monitor endpoints and remote employees.
Before we can understand how these preparations can reduce costs, let’s look at the average cost of data breaches.
The Average Cost of Data Breaches
For more than a decade, the Ponemon Institute has been researching the financial impact of data breaches. They do this by studying companies that have experienced them. More than 500 organizations from around the world participated in the 2021 Cost of a Data Breach Report, sponsored by IBM Security. The size of their breaches ranged from approximately 2,000 to 101,000 compromised records. The researchers discovered that the average cost per compromised record is $161 (USD), 10% higher than the 2020 report. This figure might not sound too bad until you do the math.
If your business has 5,000 records, a breach could cost you $805,000. According to the study, the 2021 report had the highest ever average data breach cost, at $4.24 million (USD). This correlates to an average of 26,335 records in a data breach.
Businesses Can Save Money by Being Prepared
Preparing for a data breach offers many advantages, including a faster reaction time when one occurs, better coordination between the individuals responsible for dealing with the event, and more effective communication, especially with customers. Additionally, being able to tell customers that any compromised data was encrypted and thus useless to anyone who acquired it can go a long way in maintaining their trust and their business. The 2021 Cost of a Data Breach Report quantifies the benefits of the top three preparations as follows:
- Companies with a zero trust security model experienced breach costs that were $1.7 million less than companies without zero trust models.
- Organizations with an incident response plan lost $2.46 million less than companies without a plan in place.
The results of the 2021 Cost of a Data Breach Report highlight the importance of being proactive when it comes to data breaches. Besides implementing security measures that will help your business avoid data breaches, you also need to be prepared for a breach. Cardinal Technology Solutions can help you on both fronts. Contact us today and ask about our “Risk Intelligence” scans and ETDR solutions. These scans and network defense technology will go a long way in helping you reduce your liability in the event of a breach.