Critical Read

Data breaches are getting more expensive

What: Ponemon Institute's ninth annual Cost of Data Breach Study, sponsored by IBM.

Why: The average cost of a data breach has increased from $5.4 million to $5.9 million in the past year, reversing a downward trend seen in the previous two years. An increased cost per compromised record -- up from $188 to $201 this year -- and a 15 percent surge in customer turnover after a data breach appear to have had a prominent effect on the increased cost.

Nevertheless, the authors have identified a number of factors that could help reduce the cost of future attacks, in addition to listing factors and actions that prove detrimental to organizations' responses to such attacks.

The report details contextual factors that contribute to the cost of a security breach and compares them across nine years' worth of information. It also presents an analysis of the probability that an organization will experience a security breach in the next two years based on the number of records stolen in other breaches and the company's industry.

Verbatim: "One of the goals of this research is to provide insights on what the potential costs of a data breach could be based upon certain characteristics. This understanding can lead to the better allocation of limited resources to the prevention, detection and resolution of a data breach. Consistently our research reveals the severe financial consequences from malicious or criminal acts. These data breaches can prove to be the most costly and should encourage the use of appropriate technologies and tools that prevent such threats."

Full report: Click here.

About the Author

Jonathan Lutton is an FCW editorial fellow. Connect with him at


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