The Rising Cost of Data Breaches
Increasingly, expert data thieves are infiltrating companies that store important personal information, using sophisticated tools to bypass their often aging and outdated security systems. Companies, especially those in the financial, retail, and medical industries, are burdened by the costs of protecting their data and restoring it after a data breach has occurred. What do these rising costs mean for MSPs? MSPs must help to ensure that their clients’ data is protected while using their cloud-based file sharing services.
A data security research organization, the Ponemon Institute, conducted a study of 350 companies from 11 different countries that had encountered a data breach in the past year. Their findings are sobering.
How much do data breaches cost?
The Ponemon Institute found that the cost of data breaches is rising. While a few years ago, the cost was $3.5 million, it is now $3.8 million. A single stolen record costs a company $154, an increase from $145 last year.
Some industries and companies are at even higher financial risk. The largest corporations, including Target and Sony, paid out much more than the average—Target’s breach cost the company $148 million. The healthcare industry is more vulnerable to expensive data breaches than any other industry. A single stolen healthcare record costs the company an average of $363, $200 more than the average cost across industries.
Where do the costs come from?
After a data breach, companies hire outside IT experts to figure out what caused the breach and repair the security system, establish a way for customers to quickly report any problems, and monitor victims’ credit. Though more difficult to calculate, companies also pay up when clients switch their business to another company.
Why do data breaches happen?
From Home Depot to JP Morgan Chase, no business, no matter how large and profitable, is immune to data breaches. Caleb Barlow, vice president of IBM Security, says that the problem is that these data breaches are not the result of lone hackers, they are the work of organized criminals who “work Monday to Friday. They are probably better funded and better staffed than a lot of people who are trying to defend against them.”
Where organized crime groups spend all of their time finding and exploiting the weakness in companies’ security systems, companies often lack qualified personnel who are dedicated exclusively to maintaining and updating security. Protecting against these modern, sophisticated threats requires much more than just downloading the latest version of anti-virus software—it requires constant vigilance and the same level of technical know-how as the thieves themselves possess.
What Can MSPs Do?
Too often, companies’ security systems are not up-to-date and leave gaping holes that data thieves are all too happy to exploit. Companies that store private data such as Social Security numbers, bank account information, and credit card numbers need to hire security experts of their own to counteract these threats.
MSPs are not immune to the threats of hackers that are intent on identity theft. They should work to put better protections and security measures in place, as well as train their staff to provide the best possible security to clients, providing their customers with the IT expertise and the tools they need to stay one step ahead of data thieves. After all, if a data breach occurs on an MSP’s watch, the costs and consequences in terms of loss of clientele could be devastating.
