2014 FORECAST FOR THE DATA BREACH INDUSTRY
Over the past decade, we’ve seen an explosion of security incidents impacting millions of consumers worldwide. This year alone, the number of data breaches both experienced and reported increased with no signs of slowing. Companies are beginning to realise it’s not if but when they may be victim to a security incident. As new security threats are constantly arising and regulators are pushing for more transparency, organisations are faced with the need to prepare for developing challenges.
Looking ahead, all signs point to 2014 being a critical year for companies to prepare and be able to respond to security incidents and data breaches. To better prepare, it’s imperative that companies understand the evolving data breach environment. Based on our experience, there are six key predictions companies should monitor in 2014.
Data breach costs down, but still impactful
According to a study by Ponemon Institute last year, the cost per record has dropped from $194 to $188 (‘Medical Identity Theft: Recommendations for the Age of Electronic Medical Records’, Kamala D. Harris, Attorney General, California Department of Justice, October 2013). The cost per record of a data breach is likely to continue to decline, largely due to increased awareness among companies of how to prepare for and mitigate the damage caused by any single incident. But, this doesn’t mean that companies can begin to let their guard down.
Security incidents and other breaches still cause significant business disruption if not properly managed. According to the Ponemon Institute, a breach in the United States will cost a company anywhere between $5m and $6m annually, including the financial toll of reputational damage (‘2013 Cost of Data Breach Study: Global Analysis’). In the case of a small business experiencing a data breach, it could be fatal, resulting in the business closing its doors (US House of Representatives Rep. Chris Collins, (R-NY), testimony during March 2013 hearing). Companies need to understand how to identify and respond to security incidents to manage customer concerns after an incident and mitigate reputational damage.
Jan-Mar 2014 Issue
Experian Data Breach Resolution