Data breaches can wreak havoc on businesses—not only in the price to fix them, but what they do to their image among customers. As we prepare for the release of the 2020 Ponemon Institute Data Breach Report, there is something extremely interesting to note about the 2019 Ponemon Institute Report — the cost to fix a data breach isn’t even the most expensive part of a data breach for companies.
Data Breaches = Confidence Breaches
Interestingly enough, the cost of lost records and breach repair responses were not the highest cost related to data breaches. Instead, lost business from a lack of consumer confidence in compromised companies was the most significant cost associated with data breaches. The study found a direct correlation between data breaches and customer turnover. The lost business— due primarily to a lack of confidence—accounted for 36% of the costs associated with data breaches in 2019. This lack of confidence accounted for a customer turnover of around 3.9%.
Other Key U.S. Data Breach Report Findings
In the U.S., the cost average per data breach rose from $7.91 million in 2018 to $8.19 million in 2019—the highest cost in the world. United States Data Breach Statistics
- Data breach average size: 25,575 records
- The time to recognize and stop a breach: 245 days.
- The cost per breached record: $242 (nearly double the rest of the planet)
- The industry hit hardest by costly breaches was healthcare.
Getting Sharpened by Hard Times
As we hold our breath in expectation for the 2020 Ponemon Data Reach Report, dismay shouldn’t be the knee-jerk reaction to any data we find. Instead, companies should look at the information for clues of how to sharpen their organizations against data breaches and data loss. Just as we learned in 2019 about the cost of lost confidence resulting from data breaches, so too let us read between the lines in 2020 about how we can better serve our customers with enhanced data security.