Data breach cost rising

2010-01-26

Data breach incidents cost US companies $204 (£125.77) for each compromised customer record in 2009, research has indicated, up from $202 in 2008.

Indeed, it seems that firms are having to pay out more as a result of data breach cases, with the average total per-incident costs in 2009 amounting to $6.75 million, compared to the 2008 figure of $6.65 million, according to the Ponemon Institute study, sponsored by PGP Corporation.

"In the five years we have conducted this study, we have continued to see an increase in the cost to businesses for suffering a data breach," commented Dr Larry Ponemon, chairman and founder of the Ponemon Institute.

"With a variety of threat vectors to contend with, companies must proactively implement policies and technologies that mitigate the risk of facing a costly breach," Dr Ponemon added.

Phillip Dunkelberger, president and chief executive officer of PGP Corporation, said that the study proves companies that do not adequately protect their data face "expensive direct costs" from any breach that occurs, as well as a drop in customer confidence.

He added that data breach incidents are becoming too frequent and companies should not ignore the protection of the sensitive data they have.

The research also showed that third-party organisations accounted for over two-fifths (42 per cent) of all data breach cases, a fall from 44 per cent in 2008. Meanwhile, the most expensive data breach included in the research ended up costing a company almost $31 million to resolve. The least costly was still fairly significant at $750,000.

As part of the research, 45 data breach incidents were analysed in detail, with those companies included in the study coming from a variety of industries, including finance, education and technology.

In related news, Perimeter E-Security named its top data security threats to organisations for this year, with malware highlighted as a serious danger.

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