February 2009 Newsbrief
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In their fourth annual study of data breaches, the Ponemon Institute
found that a data breach cost an organization an average of $6.6 million in 2008 reports Brian Krebs in the Washington Post.
The Ponemon Insititute examined breaches at 43 companies to come up with its results.
These costs include direct costs such as notifying customers and hiring forensic experts as
well as indirect costs such as the abnormal churn after a breach.
The cost per compromised record in 2008 was $202, a rise of 2.5% from the previous year. Costs for first-time
sufferers of a breach were much higher than companies who have previously suffered a breach.
Somehwat surprisingly, a staggering 84% of the companies examined have experienced a breach in the past.
The largest costs of a data breach are associated with the loss of business that follows the
announcement of a breach. Healthcare and financial services suffer the largest churn of
the businesses examined.
44% of respondents reported a third party was the cause of their breach, as
compared to 21% in 2005.
McAfee estimates that as much as $1 trillion may have been lost by businesses due
to data breaches and identity theft last year.
As the costs of data breaches become better understood, some businesses are slowly
implementing preventative plans and procedures. However, these businesses
have typically been hit by a data breach in the past and fully understand the costs.
Because business is slow to become serious about preventing data breaches, we can expect
to read more about breaches in the coming years.
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