Nowadays, data breaches are a grim reality and a party of the daily grind for organizations – no matter what sector or size. Enterprises are exposed to hackers and malicious insiders daily. As ubiquitous as they are today, threats and vulnerabilities are only advancing and becoming more serious as technology matures. Not only because of the advances in tech, but also because bad actors are enlisting increasingly sophisticated ways to compromise information systems, while behaving more like crime syndicates with increasingly complex organizational structures.
To top that, data breaches are a costly issue. According to the Global Overview from IBM Security and Ponemon Institute, the global average cost of a data breach is $3.86 million, up 6.4 percent from 2018. The average worldwide cost (from 2018) for each stolen record that contains classified information is at $148 per record, which stands for 4.8 percent increase from 2017.
Why Is the Cost of Data Breaches on the Rise?
The Ponemon Institute revealed that 36% of the cost of a data breach comes from the loss of business that occurs from a loss of consumer trust after a cyber-attack. This is the equivalent of $1.44 million. It now costs an average of $3.92 million dollars. The average size of a data breach is 25,575 records, and the average cost per record is $150.
Since the damage from a breach is rarely restricted to just one part of a corporation’s procedures, the cost of losing sensitive data unavoidably harms a business in various areas, generating responsibilities and constraints that can take years to overpower. The actual cost of a breach is practically higher than the Ponemon calculation, because it entails lost opportunities and viable disadvantages that are difficult to calculate. When assessing its risks, though, a company should contemplate each one of the costs it might encounter after a data breach.
According to the IBM-Ponemon study, certain factors contributed to the increased cost of a data breach, including failure to achieve compliance, extensive cloud migration, and IT infrastructure and system complexity. Additionally, the involvement of third-party contractors and consultants significantly increased the cost. The total increase was $370,000
Airbnb Reported a Net Loss of $322 for the First Nine Months
Case in point with Airbnb, whose customers complained that their accounts were hacked, services booked in their names to the tune of thousands of dollars and more. Airbnb reported a net loss of $322 million for the first nine months of 2019, compared to turning a $200 million profit the year prior. Brian Chesky, CEO and Head of Community for Airbnb, announced a security initiative that costs $150 million to implement.
What Are the Consequences of a Data Breach
Data breaches instigated by cybercriminals occur most often and are pricey. More than half of the cases are produced by a malicious attack, and it takes more than 10% longer to remediate a breach of this sort. This explains why a breach caused by a malicious attack costs up to 25% more than one caused by human error – an average of $4.5 million vs. $3.5 million.
Location and Industry Determining Factors in Data Breach Cost
The location and industry of targeted organizations can also influence the cost of a data breach. The country with the top costs in data breaches is the United States, where the average cost is $8 million. The industry with the highest costs is healthcare with an average of $6 million for a breach. A perfect example of a cyberattack frequently used by hackers is ransomware. In 2020, it is predicted that malicious actors will target victims, for example, users of medical devices, with the awareness that targets will payout the ransom quickly to protect the safety of patients.
Learn more about Collateral damage of a privileged information data breach here
Threat Modeling Could Save You Millions a Year
There are measures companies take to reduce the costs curtailing from a data breach. These measures include the implementation of a threat modeling tool that can integrate security into the software development lifecycle. Along with this, it is important to have the right the team of security professionals able to take a proactive approach with an incident response plan. The combination of these two components can decrease the cost of a data breach by up to $1.5 million.
No matter which industry you work in, no organization wants to cover the cost of a data breach. Worst part, this damage goes beyond finance, a company’s reputation can generate a huge loss. To avoid these damages, it is vital that you have thorough control over sensitive data you are managing. This is where Threat modeling can aid your company to execute a proactive strategy and retrieve measures in your company.
ThreatModeler to Help Your Business Reduce the Likelihood of a Data Breach
The chance of suffering a data breach in the next two years is nearly 30%. With ThreatModeler, you can radically reduce that risk. ThreatModeler provides a great way to visualize your attack surface and map out the various threats and attacks vectors that it may contain. Threat modeling traditionally uses process flow diagrams to lay out the different components, user behaviors and communication flows. Now with the internet, mobile and IoT-embedded devices, the attack surface increases, thereby increasing the amount of attack vectors also increase.
Threat modeling used to be a manual process and took many hours to complete. ThreatModeler is a leader in the threat model creation space and has automated key tasks to save organizations up to 80% on time-cost. ThreatModeler comes out-of-the-box integrated with trusted threat libraries and security guidelines as outlined by AWS, OWASP, the NVD and others. ThreatModeler lends itself to IT project management with its Jira integration, enabling DevSecOp teams to assign tasks, and keep track and communicate on progress as needed. To learn more about how ThreatModeler can help you, schedule a live demo with our team. You can also contact us directly to speak with a threat modeling expert.