IBM Report: Data Breach Costs Soar to All-Time High, Impacting Consumer CostsIBM Report: Data Breach Costs Soar to All-Time High, Impacting Consumer Costs
The financial ramifications linger long after a breach has occurred.
July 27, 2022
The global average cost of a data breach has reached an all-time high of $4.35 million, according to an annual IBM report. This is likely contributing to the rising costs of goods and services.
The IBM report is based on analysis of real-world data breaches experienced by 550 organizations globally between March 2021 and March 2022. IBM Security sponsored and analyzed the research, which the Ponemon Institute conducted.
Data breach costs have increased nearly 13% over the last two years. In addition, 60% of studied organizations raised their product or services prices due to a breach, when costs already are soaring worldwide amid inflation and supply chain issues.
The IBM report found 83% of organizations in the study have had more than one data breach since opening. Another factor rising over time — the after-effects of breaches on these organizations. These effects linger long after they occur, as nearly one-half (50%) of breach costs are incurred more than a year after the breach.
Factors Influencing Rising Costs
Limor Kessem is IBM Security‘s principal consultant of cyber crisis management. She said there are various factors influencing breach costs.
IBM’s Limor Kessem
“The volume of cyberattacks is only increasing while the security industry continues to deal with a skills shortage,” she said. “There’s a finite number of incident response professionals available to respond to this growing number of attacks. So naturally many businesses aren’t able to contain and recover from these attacks fast enough. And the longer a breach life cycle lasts, the higher the costs and damages a business will incur.”
A lot of breaches occur in poorly secured clouds, where the scale of data is higher, Kessem said.
“The more records are lost in each case, the more costly the breach,” she said. “We also see this in third-party compromises, where one breach can impact a number of organizations. The other is that we’re seeing more ransomware and destructive attacks than before, which are much costlier to businesses due to the disruption and downtime that follows. Twenty-eight percent of breaches were caused due to one of these two forms of disruptive attacks.”
See our slideshow above for more from the IBM data breach cost report.
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