A recent report by The Ponemom Institute and Symantec found that data breaches cost enterprises $126 per lost record.
“Five years ago when we started reporting on data breaches in the UK, data breaches were a pretty nebulous concept,” stated Larry Ponemon, the institute’s founder.
The study was conducted across 36 UK companies with data losses ranging from 3,500 to 78,000 records.
The average cost of a data breach was found to be $5.5 million in 2011. This is down from an average of $7.2 million in 2010.
“Nearly shocking to me, the cost of data breach declined,” stated Ponemon.
The most expensive type of breach was found to be criminal. In addition occurrence of such breaches has risen by 2% within the last year.
Ponemom has been conducting such studies for 7 years. The system used is an activity-based costing model developed by Professor Robert S. Kaplan.
The model takes a number of things into account including investigative activities, communications, consulting, legal work and efforts to maintain customer trust. These elements are culminated to assess the overall cost of a data breach.
Interestingly the report found that organisations which notified customers too quickly of data breaches without fully assessing the situation were forced to pay an extra $33 dollars more per lost item.
In addition organisations with a Chief Information Security Officer taking overall data responsibility saved $80 per lost record.
Data breaches were largely (33%) found to be due to negligent employees or contractors. Last year hacking was the number one cause.
This is positive news however it is essential that organisations continue to focus on policies which address malicious hacks.
