Ever-Increasing Data Breach Costs: Why and What to Do
Data breach costs keep rising—it’s a perennial occurrence at this point to see these types of statements. But it doesn’t necessarily need to be the default for this trend to continue. In fact, you could argue that frequent reports, warnings and advisories should help drive costs down. So, what’s going on with ever-increasing data breach costs? And what can you do about it?
Unpacking the Trend of Increasing Data Breach Costs
Perhaps the most cited figure in cybersecurity comes from IBM’s annually published Cost of a Data Breach report. And with good reason—this report offers an in-depth analysis of the financial impact of data breaches across various industries and regions. It draws on real-world data to provide insights into the average cost of a breach, the factors that influence these costs and trends over time.
The IBM data breach cost is basically the benchmark figure; a reference point if you want to understand and mitigate the financial risks associated with data breaches. Rather than dive into the specific number here, though, a notable finding was that data breach costs rose by 10% this year, which is the largest increase year-over-year since the onset of the COVID pandemic and all the cybersecurity chaos that ensued alongside technological change.
Let’s unpack this trend and explore some reasons why data breach costs continue to increase (and by quite a significant percentage this year):
Staff shortages
The ongoing cybersecurity staff shortage issue has become more acute over the last 12 months. IBM’s report mentions that 26.2% of companies faced understaffing issues compared with the previous year. When you lack sufficient staff to configure and monitor complex IT environments or detect and respond to threats, bad actors are more likely to find a way to access your most sensitive resources and data.
Lack of data visibility
On another data-related point, a lack of full data visibility leaves companies at risk of more serious data breaches. A key factor in this visibility issue is the presence of shadow data. Shadow data exists outside of your officially managed and secured data stores. This can include files stored on personal devices, data copied to unauthorized cloud services or information saved in unapproved apps.
Because this data is created, stored and shared without your IT or security team’s knowledge, it remains unmonitored and unsecured. A lack of full visibility makes it harder to detect breaches, increases the risk of compliance violations, and drives up the cost of conducting post-breach investigations.
Legal and PR costs
As breaches become more common, so does the cost of legal actions and reputation management. From class-action lawsuits to regulatory penalties and the need for expensive PR campaigns to restore public trust, these costs quickly add up. The damage to brand reputation from a data breach can also result in long-term revenue loss, further driving up the overall cost.
More supply chain vulnerabilities
Data breaches increasingly begin with compromises of third-party vendors or partners. As supply chains become more interconnected and global, the risks associated with third-party breaches rise. Managing these risks is complex and costly, mainly because these breaches happen outside your direct control. Even governments aren’t safe from these incidents; a compromise of a payroll company for the UK’s Ministry of Defense resulted in access to data on 270,000 service personnel.
Shifting to a Proactive Cybersecurity Stance
Whatever way you look at things, the ever-increasing data breach costs show that a reactive stance—one where you respond to threats and breaches as they occur—leads to greater financial, operational and reputational damage. A proactive cybersecurity stance emphasizes preventing breaches before they happen, reducing the impact of those that do occur, and improving overall resilience.
This type of cybersecurity stance involves continuous monitoring and real-time threat detection, allowing for quicker responses that contain breaches before they escalate. You’ll also need to conduct regular vulnerability assessments and penetration tests to seek out weaknesses before threat actors find them. Shoring up access control with strict verification for all access requests and least privilege principles is another way to get more proactive with security.
Make sure to factor in automation, especially in incident response. Create and automate incident response workflows to reduce the time it takes to respond to and recover from incidents. Also, try to automate backup and disaster recovery solutions. Test all of this through simulations and drills to ensure the automation achieves its goal of damage mitigation.
Lastly, recognize the ongoing challenges with cybersecurity staff shortages are not easily solvable in-house. External experts can provide insights and expertise that may not be otherwise available to you. Partner with managed security service providers (MSSPs) for regular security audits, threat hunting, dedicated monitoring and response, and more.
Nuspire has a range of services to help bring your business from reactive to proactive cybersecurity and reduce your exposure to rising data breach costs. We’ll help thwart attacks across your environment with an always-on MDR service to detect and respond to threats.
Alternatively, consider our vulnerability management or cybersecurity consulting services as other areas in which we can help.
Contact us today and learn how we can best help your business.
