The average cost of a SMB data breach is now $117,000 per incident, according to a large study of data breach costs at small to medium sized businesses.
The study was conducted by Kaspersky Lab and B2B International, with over 5,000 businesses in 30 countries asked about the costs of resolving data breaches.
There has been a rise in the average cost of a SMB data breach again this year and some notable changes to how those costs break down, compared to last year when the study was previously conducted. There were also notable differences between the main costs for SMBs and large enterprises.
Last year, the single biggest cost of data breaches was the reallocation of staff time, although this year, respondents from SMBs said the biggest costs were the loss of business as a result of a data breach and bringing in external experts to help investigate and resolve data breaches.
Out of the $117,000 average cost of a SMB data breach, $21,000 was spend on bringing in external experts and a further $21,000 had to be covered as a result of lost business. Other major costs were additional wages for staff ($16,000), credit rating damage and increases in insurance premiums ($11,000), improving software and infrastructure ($11,000), repairing brand damage ($10,000), and employing new staff ($10,000). The lowest costs were training ($9,000) and compensation ($8,000).
Kaspersky Lab points out that the reason these costs are so high for SMBs is likely due to a lack of skilled in-house staff, meaning they have little choice but to call in the professionals. Small businesses are also particularly vulnerable to loss of business as a result of a data breach. However, the study showed that small to medium sized businesses tend not to have to dig deep to pay compensation, which has been attributed to less formal business relationships.
The cause of SMB data breaches has a significant bearing on resolution costs. Some types of attack proved much costlier to resolve. The average cost of a SMB data breach that resulted from a targeted attack was $188,000, followed by security incidents affecting non-computing connected devices (IoT) at $152,000 per incident.
Breaches caused by the loss of devices containing sensitive information cost an average of $83,000 to resolve, inappropriate use of IT resources cost $79,000, while virus and malware infections were the cheapest to resolve, costing an average of $68,000.
For enterprises, average data breach costs jumped from $1.2 million in 2016 to $1.3 million in 2017, with the main costs of a breach being additional wages for internal staff ($207,000), software and infrastructure improvements (172,000), bringing in external professionals ($154,000), training ($153,000), lost business ($148,000), and compensation ($147,000).
SMBs have increased spending on IT security in response to the increased threat of attack, devoting 19% of their IT budgets to security compared with 16% in 2017. There was a much smaller increase in security spending at very small businesses (1-49 employees), rising just 1% from 13%-14% of their IT budgets. There was no change in spending for large enterprises (1000+ employees) with 19% of IT budgets spent on security.