Generative AI
CyberRisk
February 14, 2024
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The Cost of a Data Breach Report provides IT, risk management, and security leaders with quantifiable evidence to enhance their security investments, risk profile, and strategic decision-making processes. The 2023 edition, representing the report's 18th consecutive year, was independently conducted by the Ponemon Institute and sponsored, analyzed, and published by IBM Security, Link to the detailed report here.
It studied 553 organizations impacted by data breaches occurring between March 2022 and March 2023. This blog aims to provide insights into the specific challenges and trends revealed in the report and how organizations can leverage Alfahive RiskNest to improve their cybersecurity posture. It will focus on how the SaaS platform empowers risk managers with the technology to automate cybersecurity assessments, quantify cyber risks, manage third-party risks, and take remediation actions.
The Cost of a Data Breach Report provides a global picture of the cost of data breaches, built using data from over 553 breaches in 16 different countries and considering hundreds of cost factors. This section examines critical metrics at the level of global average. We also explore the average per-record comparative costs between countries and industries.
· Average total cost of a breach: The average cost of a data breach reached an all-time high in 2023 of USD 4.45 million. This represents a 2.3% increase from the 2022 cost of USD4.35 million. Taking a long-term view, the average cost has increased 15.3% from USD 3.86 million in the 2020 report.
· Average cost difference between breaches that took more than 200 days to find and resolve: Time to identify and contain breaches known as the breach lifecycle continues to be integral to the overall financial impact. Breaches with identification and containment times under 200 days cost organizations USD 3.93 million. Those over 200 days cost USD 4.95 million a difference of 23%.
· The effect of extensive security AI and automation on the financial impact of a breach: Security AI and automation were shown to be important investments for reducing costs and minimizing time to identify and contain breaches. Organizations that used these capabilities extensively within their approach experienced, on average, a 108-day shorter time to identify and contain the breach. They also reported USD 1.76 million lower data breach costs compared to organizations that didn’t use security AI and automation capabilities.
· Most organizations continue to increase the prices of services and products as a result of a data breach: The majority (57%) of respondents indicated that data breaches led to an increase in the pricing of their business offerings, passing on costs to consumers. This finding is similar to our 2022 report, where 60% of respondents said they increased prices.
· Breaches that initiated with stolen or compromised credentials and malicious insiders took the longest to resolve: This year, it took nearly 11 months (328 days) to identify and contain data breaches resulting from stolen or compromised credentials, on average, and about 10 months (308 days) to resolve breaches that were initiated by a malicious insider. Those two vectors, along with phishing and business email compromise, were also responsible for the costliest breaches.
· Nearly one-quarter of attacks involved ransomware: Destructive attacks that left systems inoperable accounted for one out of every four attacks, and another 24% involved ransomware. Business partner and software supply chain attacks accounted for 15% and 12% of attacks, respectively. At USD 5.13 million, the average cost of a ransomware attack in the 2023 report increased 13% from the average cost of USD 4.54 million in the2022 report.
Ponemon used a confidential and proprietary benchmark method that has been successfully deployed in earlier research. However, the inherent limitations with this benchmark research need to be carefully considered before drawing conclusions from findings. The IBM Data Breach Report is a valuable resource for understanding the financial implications of data breaches. However, it has several limitations when it comes to cost estimation:
· Exclusion of Small and Large Breaches: The report excludes very small and very large breaches from its calculations. The data breaches examined in the study typically range in size between 3,400 and 99,730 compromised records. This means the report may not accurately reflect the costs associated with breaches outside of this range.
· Long-term Financial Impact: The report primarily focuses on the immediate costs of a data breach, such as detection, escalation, and response costs. It may not fully account for long-term financial impacts, such as reputational damage, loss of customer trust, and potential regulatory fines.
· Industry-specific Impacts: The report's findings are based on averages, which may not accurately reflect the costs for specific industries. For example, sectors like healthcare, financial services, and energy may face higher costs due to regulatory requirements and the sensitive nature of the data they handle.
· Geographical Limitations: The report primarily focuses on breaches in larger, more developed markets. This could limit its applicability to organizations operating in emerging markets or regions with different regulatory environments.
· Limited Scope of Data Breach Cost Items: The report limits items to only those cost activity centers that it considers crucial to data breach cost measurement. This could potentially exclude some relevant cost factors.
In conclusion, while the IBM Data Breach Report provides valuable insights, it should be used in conjunction with other resources and tailored to the specific context of an organization for accurate cost estimation.
Alfahive makes understanding cyber risk more meaningful. Our SaaS platform empowers risk managers with the technology to automate the assessment, quantification and prioritisation of cyber risks. It enables organisations to achieve efficiency gains and cost savings by automating their cyber risk management decisions.
· Automatically Convert Security Controls into Cyber Risks: Our Cyber Risk Automation Platform seamlessly integrates with enterprise security tools through APIs. By using MITRE ATT&CK and D3FEND frameworks, it intelligently translates security controls into the likelihood of Cyber Risks.
· Effortlessly Quantify the Impact of Cyber Risks to Your Business: Our platform is trained on large set of cyber loss events data and industry specific risk scenarios. It enables you to effortlessly assess the impact of Cyber risks to your business, compare with your peers and make informed risk decisions.
· Prioritise Risks and Report Strategically: Our platform automates risks prioritization by simulating the controls against cyber threats. With built-in reporting and dashboarding capabilities, the need for manual reporting is significantly reduced, enabling strategic engagement with board members and regulators.
· Empower smarter cybersecurity decision making: with real-time insights and actionable intelligence, empowering board members to make data-driven decisions about their organization's cybersecurity strategy.
· Third-Party Risk Management: With Alfahive's RiskNest solution, organizations can streamline their third-party risk management processes and gain greater visibility into potential vulnerabilities and threats. By leveraging these capabilities, organizations can proactively address third-party risks and enhance their overall cybersecurity posture.
The Cost of a Data Breach Report 2023 offers a compelling glance into the evolving landscape of cybersecurity threats and their financial implications. As organizations manage with increasingly sophisticated attacks and scaling breach costs, it becomes imperative to adopt proactive measures to mitigate risks and fortify defenses. The burden falls not only on Chief Information Security Officers (CISOs) and security teams but also on the board members who struggle with increased responsibilities and accountability. While the insights provided by the Data Breach Report are invaluable, it's crucial to acknowledge its limitations and supplement findings with additional resources tailored to each organization's unique context. By taking a proactive approach and leveraging innovative solutions like RiskNestTM, organizations can mitigate the financial and reputational impact of data breaches while staying ahead of emerging threats.
