The continued threat of data breaches and safeguarding sensitive corporate information are the key factors behind the growing investment in security strategies and technologies, a new survey has found.
The survey of 115 C-level business executives in the UK was conducted by The Ponemon Institute and commissioned by IBM. Alarmingly, the report, entitled “The Business Case for Data Protection: A Study of CEOs and other C-Level Executives in the United Kingdom“, found that 77 percent of C-level executives reported that their organisation has experienced a data breach at some point, while all respondents disclosed that they have had their data attacked in the last 12 months.
These figures show that data breaches continue to be the number one worry for corporate executives. This was confirmed by 76 percent of respondents feeling that reducing potential security flaws within business-critical applications is the most important aspect of their data protection programme.
There is little doubt that good data protection practices help organisations deal with issues such as compliance, reputation management and customer trust, but it seems that executives are nervous of any future threats. Only 18 percent of respondents are very confident that their organisation will not suffer a data breach within the next year. However, 81 percent did feel that investing in a security strategy can greatly reduce or mitigate the risk of data loss or theft.
Indeed, the investment to safeguard corporate data does seem to impact on an organisation’s bottom line, after the survey found that the average cost savings or revenue improvements resulting from data protection initiatives totalled £11 million for those organisations.
“We are witnessing C-level executives implement security strategies at a much higher rate than ever before,” said Dr. Daniel Sabbah, general manager, IBM Rational. “The results from this Ponemon Institute study underscore the increased understanding among business leaders around the importance of addressing security defects at the earliest stages possible, before they become too costly to fix and cause irreversible harm and damage to the business.”
The study estimated that the average data breach cost, per compromised record, is £112, while CEOs estimated it to be £143 per compromised record. Meanwhile 34 percent of respondents perceive that the frequency of security attacks happens on an hourly basis.
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The data from the Ponemon Institute once again serves as a stark reminder of the real world costs of lax data security.
Failure to clamp down on data security has real and painful consequences for any organisation, regardless of whether it is a public or private sector body. Data breaches cost jobs, create catastrophic bad press and can have a painful impact on the bottom line.
Coupled with the new powers of the Information Commissioner’s Office to fine companies in the UK upwards of £500,000 for each instance of a data protection failing, and the final overall cost of a breach or loss could very quickly dwarf the £4.1 million ($6.75 million) average per incident revealed by the Ponemon Institute earlier this year.
The financial impact of the breaches examined in this report underline the growing value of data as a business asset. The Ponemon Institute revealed that the most expensive data breach event in the last year cost a company nearly £19 million to resolve, the cheapest being £463,000. In the previous survey, these figures were £3.8 million and £84,000 respectively – a massive jump in just a year.
This increase is a likely knock-on effect of two years of reduced headcount and focus around data governance among some organisations. This in turn has lead to information assets being lost, stolen and exploited due to a lack of oversight. Fortunately, as the report shows, investment is increasing as companies look to correct such oversights before they become systemic.