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What to Do About High Data Breach Costs

By Judy Selby
July 02, 2013

It's not always good to be Number One. According to a newly released report from the Ponemon Institute, the U.S. is the most costly country in the world in which to have a data breach. In its “2013 Cost of Data Breach: Global Analysis” study, Ponemon reported the total cost of a breach incident in the U.S. to be $5.4 million, or approximately $188 for every exposed record. (The study is available through Symantec at http://bit.ly/16j7W15.)

Lost business costs, such as abnormal turnover of customers, reputational harm and diminished goodwill, associated with a data breach averaged over $3.03 million in the U.S. Notification costs are a leading driver of total breach response costs, and giving notice too soon can raise that cost even higher, according to the report. Although the most expensive breaches were those caused by malicious attacks by hackers or criminal insiders, the majority of breaches ' 63% ' resulted from either negligence or system glitches.

Costs associated with data breaches were highest in heavily regulated industries, such as health care, financial and pharmaceutical businesses. The per capita cost was $233 for healthcare organizations, $215 for financial businesses, and $207 for pharmaceutical companies, all well above the overall mean cost of $136. Public sector organizations and retailers had the lowest per capita cost, coming in at $81 and $78 respectively.

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