Data Breaches Breaking the Bank for Businesses

by Emily Holbrook on July 28, 2010 · 0 comments

Hope you enjoyed that headline alliteration.

But let’s talk cyber crime. In 2010 it’s rare to find someone who has never had their email account hacked (happened to me last month!) or their personal information stolen by cyber thieves. But that’s small time cyber crime compared to what’s happening to businesses around the globe.

According to a new study by Ponemon Institute, an independent research establishment, organizations are getting hit by at least one successful attack per week. Sound like a lot to you? It is. But what’s even more distressing and hard to believe is that the annualized cost to their bottom lines from the attacks ranged from $1 million to $53 million per year.

Pnemon’s first annual “Cost of Cyber Crime” report studied 45 U.S. organizations hit data breaches. It found that the median cost to companies was $3.8 million per year for an attack. Certainly enough for some bottom line blues.

“Information theft was still the highest consequence — the type of information [stolen] ranged from a data breach of people’s [information] to intellectual property and source code,” says Larry Ponemon, CEO of the Ponemon Institute. “We found that detection and discovery are the most expensive [elements].”

The report found that web-borne attacks, malicious code and malicious insiders are the most costly types of attacks, and social security numbers are the most commonly compromised form of data. According to Datalossdb.org, there have been 10 reported data breaches in the past 13 days alone. Let’s take a look at the largest reported breaches in history, courtesy of the aforementioned website:

data breach

According to the Ponemon study, the 45 organizations studied did not have the right tools or technologies in place to prevent such costly breaches (bad risk management to say the least). The leading types of attacks were malware (25%), SQL (24%) and stolen/abused credentials (16%).

Numerous tech companies, such as Cisco and Symantec, offer data loss prevention products and services.

Without data breach technology in place, a company is throwing away their hard-earned dollars. And millions of dollars at that, according to Ponemon.

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Emily Holbrook is the executive managing editor for National Underwriter Life & Health and the former editor of the Risk Management Monitor and Risk Management magazine. You can read more of her writings at EmilyHolbrook.com.

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