In our post about third-party security risks , we briefly mentioned the cost of data breaches caused by third-party vendors. Something we haven’t talked much about until this point, however, is the true cost of data breaches to your business.
For anyone who isn’t sure about the risks to your business that come along with a data breach, let’s take a look at some hard numbers to put things into perspective.
By the numbers
As our source, we’re using a study by the Ponemon Institute detailing the cost of data breaches in 2020.
The study had a few key findings that are of use here:
- The average organizational cost of a data breach in 2020 was $3.86 million in 2020. Though this is down by 1.5% in costs from 2019, it is still a 10% increase over the last five years.
- Though the average cost of a breach is relatively unchanged, IBM says the costs are getting smaller for prepared companies and much larger for those that don’t take any precautions.
- Response time matters once a breach has been discovered. While it can take an average of 280 days to completely identify and contain a breach, the report said that companies able to do it in under 200 days spent on average $1.1 million less.
It’s easy to see how quickly these numbers add up. If you’re a small business and are involved in a data breach, your business could fail as a result of high costs, and in general, it’s absolutely essential to do everything in your power to avoid such an occurrence.
There are other things to consider when evaluating the dangers and costs of a data breach. For instance, your business also has to think about:
- Monetary penalties that may result from a breach
- The cost to your consumersif you lose their data
- Damage to your business’ reputation (before even considering monetary loss)
- And if COVID-19 has sent your employees out of the office to work from home, in doing so, IBM says the average total cost of a data breach increases. When employees are working away from the office and using new network structures that may be unsecured or unknown, it can complicate a company’s incident response and security.
The risks to your business in the event of a data breach are huge, and it’s important to make sure you’re prepared. If you’re still not convinced, take a look at this calculator of costs associated with a data breach. Typing in a few numbers (for example, how many records were lost and what type) shows how things can get expensive quickly.
To make sure you’re doing everything you can to protect your business from a data breach and the enormous costs that go along with it, contact DataShield today. We offer compliance consulting to ensure compliance with laws on data protection, which is the first step to preventing data breaches.