Average Cost of Data Breach Frames Debate on Security Costs

Data scientists and financial experts are now suggesting that the costs associated with data breaches and other privacy incursions have gotten to the point where they're beyond the overall income receipts of many smaller and medium-sized businesses. This would mean that a single breach or other type of data release could cause an established firm to seriously consider bankruptcy protection in order to weather the financial storm created by just one such event. Some recent numbers have given credence to this idea, which has further increased concerns related to the issue.

According to IBM's annual Cost of a Data Breach Report, the average expenses associated with a full-scale data breach rose to more than $4.2 million. This is up from less than $3.9 million last year, which is largely due to the dramatic increases in the total number of people working from home. As the number of remote workers in some companies could continue to grow over the next 3-5 years, financial experts are warning that some form of data breach-related insurance policies might be necessary in order to protect against a possible bankruptcy event.

A few have gone so far as to suggest that a basic legislative structure needs to be put in place in order to prevent such events from becoming a possibility.

Reducing the Financial Burden of Data Breaches

Suggestions that public sector authorities should somehow shore up companies that have suffered breaches are normally met with criticisms that this could end up subsidizing bad behavior. Growing firms that get used to an outside power coming to their aid could, theoretically, avoid putting normalized security measures into play, which in turn would increase the risk of problems occurring in the future. They might also cause some resentment among taxpayers, considering that public perception is that strong password policies are enough to keep people secure.

Though the reality is clearly not so simple, the court of public perception often makes it appear to be. To make matters worse, some statistics have caused consumers to firmly place the blame at the feet of digital service operators. When more than 1 million dental patients suddenly found their accounts compromised, few people were talking about reducing the burden of data breaches for site and app operators.

According to experts from Aura, the cost of implementing new digital security standards would have greatly reduced the burden in their own right since these are much lower than what these firms had to deal with. Unfortunately, it can be difficult for managers to see just how much neglect in this space could cost them.

Slashing Costs with Preemptive Investments

A new ransomware attack is launched online every 39 seconds, so it pays to invest in the kind of software that protects against it. By avoiding such an attack, a small business naturally avoids the costs associated with it. This should be factored into the financial decision-making process that most IT departments go through.

Managers who balk at higher upfront costs could perhaps be persuaded by more affordable basic identity theft protection services, which are usually much more reasonably priced. This can become problematic, however, if those outside of the technical profession eventually get the idea that future security investments are no longer necessary.

Consumers who are concerned about inaction on the part of these operators can take at least some steps to protect themselves, however.

Consumers Moving to Reduce their Own Potential Costs

Naturally, all of the traditional advice is still quite accurate. Netizens should always verify online shopping sites and change their passwords if they believe that they've been compromised in any fashion. Data science experts are advising that they also experiment with some more esoteric options.

Popular Chromium-based browsers, for instance, include a checkup mode that ensures no unsafe extensions are installed. Use of this is essentially at no cost besides the amount of time invested. Some data experts are urging users to install some form of protective extension, though it can be difficult for individuals to distinguish between the many different options provided.

Regardless of which path is selected, it's likely that upfront prices will still have a large impact on how much any specific solution gets utilized.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes