Any narrative about cybersecurity in 2020 is naturally going to focus on the COVID-19 pandemic. This once-in-a-generation crisis and the digital transformation it accelerated both broadened corporate attack surfaces and directed resources and attention away from vital security projects. So, when we look at the IBM Cost of a Data Breach Report 2021 study, which found data breach costs at an all-time high, it’s tempting to blame it all on COVID-19. But it’s not the whole story.
Aside from 2020, breach costs have been on the rise for several years. Although the scale of the increase last year was exceptional, it’s clear that despite spending more than ever on security, many organizations still aren’t getting the desired results.
Now in its 17 year, the report provides useful insight into how well organizations are doing at finding, containing and remediating incidents – because the longer a breach goes undetected, the more it will usually cost. These costs are ascribed to four key areas:
Lost business – including system downtime, business disruption, lost customers and reputational damage. This accounted for the largest slice (38%) of breach costs this year.
Notification – to data subjects, regulators and outside experts.
Post-breach response – including helpdesk issues, credit monitoring for customers, issuing of new accounts/credit cards, legal costs, product discounts and regulatory fines.
In total, data breach costs rose from US$3.86 million in last year’s report to US$4.24 million this—a 10% increase. For “mega breaches” featuring between 50-65 million records, the average cost was US$401 million, a more modest 2% increase from US$392 million in 2020.
Stolen user credentials were the most common cause of breaches in the study, while customers’ personal data (including passwords and names) were the most common type of data exposed in these incidents, present in 44% of breaches. It’s not hard to see the correlation: as more users share and reuse passwords across multiple accounts, a vicious circle begins to form where breached data is used in turn to facilitate more intrusions and data heists.
There’s absolutely no doubt that the pandemic played a major part in the large increase in breach costs from 2020-21. Insecure remote working endpoints, distracted home workers, preoccupied IT staff and unpatched or misconfigured remote working infrastructure led to an increase in breaches and may have driven up the costs of these incidents. Nearly 20% of organizations studied in the report claimed that remote work was a factor in breaches.
