Fraud Prevention Month is underway and organizations of all sizes are examining how they can protect themselves from cybercrime. With more data breaches than ever occurring to businesses across the globe, the time is perfect to analyze how these incidents are taking place and what measures need to be in place to prevent them from happening again.
IBM conducts an annual global study on data breaches, compiling information on the frequency of these attacks, how much they cost organizations, and what kind of businesses are targeted most frequently. IBM reports that the average total cost of a data breach to the company targeted is nearly $4 million dollars, with the healthcare industry suffering the highest percentage of data breaches of any industry surveyed. This total cost includes the expenses needed to determine the full scope of the breach and remedy it, as well as potential harm to the business’s reputation in the form of lost accounts and canceled future business.
Deciphering the Costs Associated With Data Breaches
The costs of a data breach are complex, thanks to the amount of work that must be done to identify and correct an issue. These expenses are broken down into four categories, including:
- Detection and escalation: The immediate costs of identifying the issue, including forensic investigation of how the breach occurred.
- Notification: Determination of the company’s responsibility and communication with stakeholders.
- Lost business: Disruption of normal business due to lost goodwill with customers and the costs of acquiring new customers to replace them.
- Ex-post response: Activities that correct the issues that occurred as a result of the breach, such as notifying customers of actions taken and paying regulatory fees or fines.
These costs are significantly less for organizations that have a response plan to follow when an incident occurs and measures in place to react to any type of data breach. A proper incident response plan eliminates time-wasting and overanalysis by laying out steps to mitigate the damage, cutting down on each of the costs listed.
Breaches in the Healthcare Industry
The healthcare sector is the most frequent victim of cyberattacks that result in data breaches, perhaps thanks to the kind of information these businesses keep on file. With complete personal data on file for patients, there is a wealth of information for scammers to retrieve and use in identity theft and related scams. While the average cost of a data breach across industries comes in at $4 million, healthcare-related breaches cost an average of over $7 million. This cost has increased 10% since 2019 and seems poised to go up in the next year.
Expectations for 2021 and Beyond
As cybercriminals grow more sophisticated in their efforts, companies must also devise a more complete defense against these attacks. From the inception of a new site or database, designing safeguards and safety protocols into the project will help prevent potential leaks and make it harder for attackers to gain access to sensitive information.
CrossLeaf Web Engineering offers modern web design and engineering designed to protect your information and prevent fraud. Contact us to get expert help with your next project.