For years enterprises have battled to prevent and manage data breaches, yet the costs associated with data breaches keep climbing higher -- especially for organizations in highly regulated industries. The average cost of a breach today is $188 per record in the U.S, According to the Ponemon Institute, with the total costs of data breach hitting upwards of $5.4 million. Also according to Ponemon average losses are up 18% from the same survey in the prior year.
Our own Global Information Security Survey finds that breach costs are rising, as well, especially for those organizations with less mature security programs.
Is there anything organizations can do to curb rising breach costs? Turns out plenty. And most of it are things enterprises should already be doing.
Take the high probability of having to eventually endure a breach disclosure, for instance. Today, nearly all states have financial data breach notification laws, while disclosure rules for other industry regulations such as for public companies that have breaches considered material. Or those under the purview of the Health Insurance Portability and Accountability Act, which also require a good portion of breaches to be reported. Chances are, if you are breached today, you are going to have to report.
"That leaves you with two options," says David Mortman, chief security architect and distinguished engineer, Dell. "You can work to reduce your chances of a breach. Second, because breaches do happen, you can protect yourself from additional litigation due to a breach, says Mortman. And this is where state law comes into play: they ultimately determine what constitutes due care, and typically when an organization is breached and is following due care they are not as exposed to successful lawsuits.
Most of those state rules can be distilled down to keeping access to the data minimal, being able to audit access, and encrypting the data and ensuring that the encryption keys are kept separate from the encrypted data. "The simple solution is that if you think you have client data that falls under that category, keep it encrypted and don't store the keys with the data. There are not a lot of good practices out there in the world, but that's a pretty good best practice," says Mortman.
Faster detection and response will also go a long way to minimizing costs, explains Gene Kim, independent director at the Energy Security Consortium, and co-author of The Phoenix Project: A Novel About IT, DevOps, and Helping Your Business Win. "We find that in high performing organizations, when it comes to information security, they have the ability to find and resolve issues within hours and days versus months or quarters. I think this is validated by the Verizon Data Breach Investigations Report, where the actual breach occurred quarters before it was detected," says Kim.
It makes sense: the more quickly enterprises can identify breaches, the less damage the attackers can do. "In my mind, the obvious answer is to be able to find issues faster and also be able to fix them faster," says Kim.
In fact, it isn't a matter of if, but when, most any organization can expect to be breached. "It's almost like riding a motorcycle. Sooner or later you are going to have an accident," says Andrew Storms, Sr. director DevOps at CloudPassage. "It comes down to not only how well you respond, but also what you learn from the breach," he says.
Yet, despite the number of breaches, and the numerous surveys showing the associated rising costs, not everyone thinks the breach costs being reported reflects reality. After all, following a breach, no organization wants to admit that they were easily infiltrated, and if they are a public company, or there could be tax implications associated with higher breach costs, companies are actually motivated to push the cost of the breaches to as high of a number as is legally possible.
"They want to make it look like they really got nailed. They want to tell stakeholders and shareholders that they didn't perform well because they got nailed by the attacker, and it didn't have to do with anything else that they may have failed at executing that period," says Mortman.
Perhaps so, but data breaches are too common and every year they are draining enterprises of capital that can be used elsewhere. So keeping costs low entails optimizing breach identification and incident response, minimizing the chances of breach through good security practices, and prepping for proper response when it does occur.
George V. Hulme writes about security and technology from his home in Minneapolis. You can also find him tweeting about those topics on Twitter @georgevhulme.
This story, "Pulling the reins on data breach costs" was originally published by CSO.