Companies Face Escalating Costs Caused by Data Breaches

Cyentia Institute, a research company in the field of information security have released a new report that highlights the risks faced by leading brands globally.

They estimate that a quarter of Fortune 1000 companies will suffer a cyber related loss over the next 12 months and estimate a 6% chance that one of these events will costs the company is excess of $100m.

The Information Risk Insights Study identified that 10% of all incidents would exceed $20m in value, a value that has been steadily increasing over time.

Cyentia co-founder Wade Baker  stated that having looked at 10 years of data and the frequency it shows that larger organisations are most vulnerable to this problem. First, they offer a more lucrative target and secondly, their information footprint is higher making an unidentified vulnerability more likely and also more costly.

Although less costly for smaller organizations in dollar terms. The impact on a smaller organization is often much higher. Large organizations can often absorb the financial and reputational costs associated with a data breach.

Smaller organizations, on the other hand, find recovery a much harder proposition. They are impacted by the overhead on Senior Executives time, the distraction for the entire data and security team while the extent of the breach is being identified and the reputational risk associated with the data breach.

This on top of a financial cost that is likely to be a much higher percentage of available cash reserves than that suffered by a larger company.

So while the rate of SMB breaches is lower at approximately 2%, the subsequent failure rate can be much higher.