For the first time in the past seven years, the cost of a data breach has fallen, with a 10% reduction in per capita data breach costs across all industry sectors. The global study revealed the average cost of a data breach is now $141 per exposed or stolen record. The global average cost of a data breach is down to $3.62 million from $4 million last year.
The IBM Security sponsored study was conducted by the Ponemon Institute, which has been tracking the costs of data breaches for the past seven years. In every other year data breach costs have risen year over year.
The Ponemon Institute say the reduction can partly be explained by a strong dollar. In the United States, the cost of a data breach has risen from $221 to $225 per record with the total breach cost increasing to $7.35 million from $7.02 million last year.
For the study, the Ponemon Institute assessed the breach resolution costs after organizations experienced a breach and had notified affected individuals. Large data breaches – those in which more than 100,000 records were exposed or stolen – were not included in the study as they were deemed atypical. Instead, only breaches of between 5,000 and 100,000 records were included. The average size of the breaches were 28,512 records. A breach was defined as the loss or theft of a record that included an individual’s name along with either their Social Security number, financial information or medical record.
For the seventh consecutive year, the healthcare industry had the highest data breach costs. The per capita cost of a healthcare data breach was $380. The financial services, another highly regulated industry, had the second highest breach costs ($336 per record). Services sector data breaches cost $274 per record, life sciences breaches were $264 per record and the Industrial sector had a per capita breach cost of $259.
The lowest breach costs were retail ($177), hospitality ($144), entertainment ($131), research ($123) and the public sector ($110). The biggest cause of data breaches were malicious and criminal attacks, which also carried the highest resolution costs. System glitches and human error each accounted for 24% of data breaches.
An analysis of breach costs revealed there are a number of ways to reduce the cost of a data breach. Having a breach response plan in place saw companies reduce breach costs by $19 per record, while the use of encryption reduced breach costs by an average of $17 per record. Employee education helped reduce breach costs by an average of $12.50 per record.
A fast response to a data breach can also dramatically reduce the total breach cost. Organizations that were able to contain a breach within 30 days saw breach costs reduced by $1 million. On average, it takes companies more than six months to discover a breach and containing the breach takes an average of 66 days.