Data breaches have turned into an unfortunate reality for companies around the world, accounting for more than 50% percent of all security incidents reported in 2019.
While incidents vary in size and intensity, new research from iomart shows that big tech players and social media platforms could lose an average of $8.8 billion (UK companies) and $32.2 billion (US businesses) following a major data breach.
Of course, financial and reputational consequences may vary, but the study revealed an average value drop of 7.27% for large companies that fall in the expected data loss of 10 to 99 million records per incident.
The aftermath and financial toll is not just bound to a company’s size and stock prices. A 2019 report by the Ponemon Institute emphasized the importance of data breach containment, revealing a close link between the lifecycle of a data breach and monetary loss.
“The faster a data breach can be identified and contained, the lower the costs,” researchers said. “Breaches with a lifecycle less than 200 days were on average $1.22 million less costly than breaches with a lifecycle of more than 200 days ($3.34 million vs. $4.56 million respectively), a difference of 37 percent.”
In-depth analysis of how a data breach could affect major tech companies points to an estimated company value drop of $95.7 billion for Apple, $81.6 billion for Microsoft and $68.7 billion for Amazon.
For example, if a typical data breach of 10-99 million records in the tech sector takes 246 days to identify and resolve, the top 10 tech companies would lose a collective average of an expected $42.9 billion or $5.3 billion per month. However, these values do not include reputational losses or GDPR-related penalties.
When speaking of social media platforms, the report states that, they “are more likely to face higher financial impacts as a result of a large scale breach, having experienced the greatest number of compromised records over the first half of 2018 with 2.5 billion, representing a 14,927% increase on the previous year.”
Data breaches can no longer be viewed as unlikely or occasional incidents, and business large or small, must quickly adapt to the current cyber security landscape. While security defenses have proven not to be bullet-proof, business should focus on creating extensive employee trainings and make sure that any sensitive information is closely monitored or sealed off from the network. Securing data and creating backup systems can lower the cost of a data breach considerably.