What Impacts the Average Cost of a Data Breach?

According to a report from the Ponemon Institute, the average cost of a corporate data breach is around $3.6 million, or about $141 per lost or stolen record. Protect your company from the financial fallout of a breach by evaluating and mitigating these four factors contributing to higher costs.

Time Before Detection

Identifying a breach can take anywhere from a few days to more than a year. During this time, hackers could be gaining access to data you thought was secure and distributing stolen information across their networks. The longer an incident goes undetected, the more data is lost, stolen or compromised.

Companies with robust security, including incident alerts, can respond sooner and slash the cost of a data breach. Alerts may be sent when unauthorized logins are attempted, unusual behaviors take place or an employee modifies a file outside the scope of his or her network permissions.

Data Type and Amount

A large number of lost records results in a more expensive breach, and costs go up more if you’re found to be out of compliance with the standards or regulations for your industry. Legal trouble in the form of lawsuits may add another financial burden if personal information is stolen. Losing proprietary information can continue to drain profits if the perpetrator of the breach leaks the data to competitors.

Response to the Breach

Having an incident response team in place positions your business to respond quickly to a data breach and take appropriate action to handle the aftermath. Educating employees about your company’s response plan minimizes the risk of mistakes while the breach is being managed.

If you need to bring in a third party to investigate a breach and trace it back to its source, your breach costs will go up. Offering identity protection services to customers also increases expenses but may improve customer loyalty and retention.

Lost Business

Focusing on retaining customers may be the most important thing you can do to lower breach costs. Loss of business is the biggest expense associated with breaches, and consumer trust has a significant impact on how much business evaporates when an incident occurs.

Work to build strong relationships with your customers at all times by providing stellar service and doing everything you can to exceed their expectations. The investment you make in strengthening the sense of trust between your customers and your business costs much less than working to rebuild your reputation and win customers back following a breach.

Many other variables can impact the cost of a data breach, so working with cybersecurity professionals could be beneficial for your business. Once you know the potential vulnerabilities in your network, you can implement proper security and develop a response plan to minimize the costs and speed up recovery following data breaches.