The average cost of a single lost record is £60, research
conducted by privacy research firm The Ponemon Institute on behalf
of encryption company PGP Corporation. Last year's research results
showed that the cost per record was £47.
The research examined the circumstances of 30 UK data breaches,
examining both the causes and the costs of incidents. It found that
53% of the costs that companies reported were due to lost business.
"[This suggests] that the UK public cares deeply about the loss or
theft of their personal information," said a PGP statement.
"The total cost of a data breach ranged from £160k to £4.8
million, with an average cost of £60 per customer record," it
said.
The research found that just 30% of breaches were down to acts
of malice, but the fact that the other 70% of incidents were down
to insider negligence should encourage companies to take action, it
found. "More needs to be done to educate staff on the importance of
safeguarding information," said PGP.
The most expensive data breaches are those resulting from action
by third parties to whom data processing has been outsourced. These
cost organisations £67 per record rather £56 per record when no
third party was involved. The range of the cost of a data breach
was £160,000 to £4.8 million, the research found.
"2008 saw no slow down to the stream of data breaches started in
2007 – if anything they’ve gotten bigger and more costly,” said
Phil Dunkelberger, chief executive of PGP. “In this current
climate, organisations are taking desperate measures to preserve
their reputation and retain customers; this study shows they simply
cannot afford to lose out to competitors as a result of poor data
security.”
The Ponemon survey found that breaches were less costly in the
UK than in the US, where they cost $202 per lost record. It found
that the average total cost of a breach in the US is $6.65
million.
Other evidence has emerged that the frequency, as well as the
cost, of data breaches is on the increase. Research company
Enterprise Strategy Group analyst Jon
Oltsik wrote at technology site CNET News that his firm has
said that the number of firms reporting breaches has jumped from
30% in previous years to 56% for 2008.
"Armed with data from several years of surveys, I think it is
safe to assume that things are getting worse, not better," he
wrote. "Sensitive data continues to flow throughout the enterprise,
ending up in e-mails and IMs, laptops, and thumb drives, and into
the hands of malicious or careless employees--an uphill battle
indeed."
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