According to a recent IBM report, recovering from data breaches has become significantly more expensive for companies over the past year. This rise in costs is attributed to a growing number of breaches, which result in operational downtime, post-breach investigations, and potential lawsuits. Over 1 billion records have been stolen so far this year, driven by attacks on vulnerable Snowflake databases and a ransomware incident involving UnitedHealth's Change Healthcare.
The average data breach cost from March 2023 to February 2024 reached $4.88 million, marking a 10% increase from the previous year's $4.45 million average. This is the most significant annual jump IBM has observed since the pandemic began. The increase is linked to hackers stealing larger data, leading to higher cleanup costs. These expenses include identifying affected individuals and providing credit monitoring services.
Post-pandemic, most companies use a combination of cloud servers, on-premise systems, and container storage, which has pushed essential data closer to the network's edge, making it more accessible to hackers. Based on 604 organizations affected by breaches, IBM's report highlights that most costs stem from detection and escalation efforts, such as forensic investigations and crisis management. On average, organizations spend $1.63 million on these activities and lose $1.47 million in business costs, including lost sales and reputational damage.
The report also notes that over half of breached organizations face cyber staff shortages due to industry layoffs, making managing and preventing breaches challenging. However, emerging AI and automation tools offer some relief. Companies that extensively use AI report lower breach costs, with an average of $3.84 million per incident, compared to $4.64 million for limited AI use and $5.72 million for no AI use. AI tools have also helped defenders detect breaches faster than in the past seven years, with the average detection time now at 258 days and containment taking 64 days.
To mitigate these rising costs, IBM's X-Force threat intelligence team leader, Troy Bettencourt, emphasizes the importance of basic security measures like multifactor authentication, as many breaches occur due to stolen login credentials.
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