IBM security study: cost of data breach increased 15 percent to $3.5 million in 2013

An IBM-commissioned study said the average total cost of a data breach rose 15 percent to $3.5 million in 2013. Cost incurred for each lost or stolen record containing sensitive and confidential information grew more than 9 percent to $145.

The IBM study conducted by the Ponemon Institute covering 314 companies spanning 10 countries, said the most costly breaches occurred in the U.S. and Germany at $201 and $195 per compromised record, respectively. The least expensive data breaches were in India and Brazil at $51 and $70, respectively.

Countries in the Arabian region and Germany had more data breaches caused by malicious or criminal attacks.

India had the most data breaches caused by a system glitch or business process failure. Human error was most often the cause in the UK and Brazil.  The most costly data breaches were those caused by malicious and criminal attacks.

The U.S. and Germany paid the most at $246 and $215 per compromised record, respectively. These types of data breaches were least costly for companies in India and Brazil at $60 and $77 per compromised record, respectively.

A strong security posture was critical to decreasing the cost of data breach. On average, companies that self-reported they had a strong security posture were able to reduce the cost by as much as $14 per record.


The involvement of business continuity management reduced the cost of data breach by an average of almost $9 per record.

The appointment of a Chief Information Security Officer (CISO) to lead the data breach incident response team reduced the cost of a breach by more than $6.

Countries that lost the most customers following a data breach were France and Italy. Companies in the Arabian region and Brazil experienced the lowest loss of customers.

The probability of a company having a data breach involving 10,000 or more confidential records is 22 percent over a two-year period. Countries most likely to experience a data breach include India, Brazil and France.

The most common cause of a data breach is a malicious insider or criminal attack. In this year’s study, we asked companies represented in this research what worries them most about security incidents, what investments they are making in security and the existence of a security strategy.

Only 38 percent of companies have a security strategy to protect its IT infrastructure. A higher percentage (45 percent) has a strategy to protect their information assets.

Malicious code and sustained probes have increased the most. Companies estimate that they will be dealing with an average of 17 malicious codes each month and 12 sustained probes each month. Unauthorized access incidents have mainly stayed the same and companies estimate they will be dealing with an average of 10 such incidents each month.

The majority of companies (50 percent) have low or no confidence that they are making the right investments in people, process and technologies to address potential and actual threats.

Ideally companies would like to invest $14 million over the next 12 months to execute their organization’s security strategy. However, in the next 12-month period, companies anticipate having an average of about half that amount, or $7 million, to invest in their security strategy.

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