With data breaches getting more expensive by the year, almost 60% of the 550 organisations surveyed by IBM said that they have had to raise prices of their products and services to keep up. Read on to know more:
Data breaches today are more expensive than they’ve literally ever been. Consider this excerpt from the Cost of a Data Breach Report 2022 from IBM:
“Reaching an all-time high, the cost of a data breach averaged USD 4.35 million in 2022. This figure represents a 2.6% increase from last year, when the average cost of a breach was USD 4.24 million. The average cost has climbed 12.7% from USD 3.86 million in the 2020 report.”
IBM’s annual data breach report is often one of the most comprehensive in the market, and this year’s edition comprised data from 17 countries and regions and 17 different industries – the widest dataset yet.
The US faced the highest average cost for data breaches – astoundingly close to almost $10 million per breach – a 4.3% rise from the 2021 number. The Middle East came in second, albeit at an over 20% lower cost-per-breach compared to the US, whilst the Canada and UK followed at a little over $5 million per breach – justa little under half of United States’ value.
India came in fourteenth on the list, with the cost-per-breach rising about 5% compared to 2021 to cost about $2.32 million.
IBM reported: “out of the 17 countries or regions studied, six – Germany, Japan, France, South Korea, Scandinavia and Turkey – saw a decrease in the average total cost of a data breach. Brazil, 16th on the list at USD 1.38 million, saw the largest relative cost increase, up USD 0.3 million or 27.8%. Turkey, 17th on the list, saw the largest relative cost decrease, falling from USD 1.91 million to USD 1.11 million, a decrease of USD 0.8 million or 42%.”
Broad swings in currency valuations, such as occurred in Turkey, plays a role in cost variations from year to year. The Turkish Lira has lost almost half its value from its 2021 peak.
In terms of the industries most affected, healthcare saw the highest cost for the twelfth year running. The average cost per breach in the healthcare industry rose a little under 10%, to hit about $10.1 million per breach.
Outside of healthcare, the financial, technology, energy and pharmaceutical industries faced the highest costs, a top five seen unchanged from the 2021 report. The global financial industry rose about 4.4% to a little under $6 million a breach, whilst the average cost per breach went down slightly in the transportation, hospitality, media, and pharmaceutical sectors.
An alarming fact worth noting, in this regard, is the fact that data breaches in the last year for almost five-sixths, or 83% of the 550 respondents, were not the first breach they had faced. IBM notes, “with security teams handling more incidents every year and considering the impact of remote work on security, it’s likely the recurrence of breaches is climbing.”
Of the areas where data breaches turned out to be the costliest for industries, detection and escalation surpassed other options including lost business, notification, and post-breach response. Costs in detection and escalation, i.e., activities that enable a firm to reasonably detect a branch through means such as forensic/investigative activities, crisis management, assessment and audit and communications to boards and executives, saw an alarming 16% rise to about $1.44 million in 2022. IBM reported that this was the first time in six years that lost business didn’t top these charts.
As a result of this, almost 60% of the organisations said they had to raise prices of their products and services as a response to these data breaches.
[Read IBM’s Cost of Data Breach Report 2022 here]