What’s the Cost of a Data Breach?

IT security solutions

In the last 2 years, major companies such as Home Depot, Sony, JP Morgan, Ali Express, Ebay, Target and the Korea Credit Bureau have all been the victims of high profile cyber-attacks. Our latest report shows the global network security market is expected to grow nearly $5 billion by 2019 as the need for advanced security solutions is growing rapidly.

Global network security market 2014-2019 ($ billions)

Source: Technavio 2015

The cost of data breaches continues to rise for companies around the world. According to a study by data security research organization Ponemon Institute and IBM, the total average cost of a data breach is now $3.8 million, up from $3.5 million one year prior. The study also revealed the cost per stolen or lost data record is now $154, up from $145 the year before.

Most countries are experiencing a continuous increase in the cost per lost or stolen record and the average total cost of a data breach on a year on year basis. Most of the countries in the report also experienced an uptick in data breach costs between 2013 and 2014.

Graph Created by Technavio. Source: Cost of Data Breach Study

Per capita cost is defined as the total cost of data breach divided by the size of the data breach in terms of the number of lost or stolen records.

The United States leads the way with an average data breach cost of $201 per capita, more than $50 ahead second place Germany. The United States is also well in the lead in terms of data breach incidents. According to the Breach Level Index, in 2014, there were 1,164 data breaches in North America, accounting for 76% of all global data breach incidents. The United States was responsible for 1,107 of these incidents, well ahead of the United Kingdom who was second with 117.

Countries with More than One Data Breach in 2014

Graph created by Technavio. Source: 2014 Breach Level Index

There were a total of 1.02 billion breached records in 2014, up 78% from 2013. This staggering number translates to one breached record every 32 seconds. The retail sector accounted for 55% of all the lost or stolen records, while the IT sector accounted for only 9% of stolen or lost records, this number has dropped sharply from its 2013 total of 43%.

To counter future attacks, we expect massive growth in various network security platforms, especially the SaaS-based network solutions. Companies are increasingly adopting these solutions because of their multiple benefits, which include the availability of the pay-per-use model and the provision of instant access. SaaS-based network security solutions also automatically update products, enabling them to respond to the latest security threats. The growing requirements of companies (ranging from small to large enterprises) are fueling the demand for SaaS-based network security solutions.