According to IBM’s 2023 report, businesses are divided on how to deal with the increasing cost and frequency of data leaks. The study found that although 95% of companies surveyed have experienced more than one such incident, affected companies are more likely to pass the cost of these on to consumers (57%) than increase their security investments (51%).
The 2023 Cost of a Data Breach Report is based on an in-depth analysis of real-world data leaks suffered by 553 companies worldwide between March 2022 and March 2023. The study, commissioned and analyzed by IBM Security, was conducted by the Ponemon Institute and has been published for 18 years. Key findings from IBM’s 2023 report include:
- AI Picks Up Speed – AI and automation had the greatest impact on the speed with which the companies studied were able to detect and mitigate data leaks. German companies that relied heavily on both technologies experienced an 81-day shorter data leak lifecycle than those that did not (160 days vs. 241 days).
- Silence Costs – Ransomware victims in the study who engaged law enforcement saved an average of $470,000 (approximately EUR 418,000) in costs per incident globally compared to those who did not engage law enforcement. Despite these potential savings, 37% of ransomware victims studied did not engage law enforcement when a ransomware attack occurred.
- Gaps in detection – Only one-third of incidents studied globally were detected by companies’ own cyber security teams, while 27% were detected by the attackers. Data leaks that were only revealed by the attack cost a global average of nearly $1 million (about EUR 890,000) more than those at organizations that detected the attacks themselves.
“Time is the new currency in cybersecurity, for both defenders and attackers. As the report shows, early detection and rapid response can significantly reduce the impact of an attack,” said Chris McCurdy, general manager, Worldwide IBM Security Services. “Security teams need to focus on where attackers are most likely to be effective and concentrate their efforts on stopping them before they reach their targets. Investing in threat detection and response efforts that increase the speed and efficiency of defenders – such as with AI and automation – is critical to balancing this.”
Every Second Costs
According to the 2023 report, companies analyzed globally that fully deployed AI and automation in security had an average 108-day reduction in data leakage compared to companies that did not deploy these technologies. They also reported significantly lower costs for such incidents. The companies analyzed that extensively used AI and automation in the security space also reported nearly $1.8 million (about EUR1.6 million) lower global average data leak costs than companies that did not use these technologies – the largest cost savings identified in the report.
This trend was also evident among German companies. Those already making extensive use of AI and automation in cyber security reported an average cost of “only” EUR3.51 million per loss event. Companies that do not use such technologies faced average costs of EUR 5.27 million per data leak. This corresponds to EUR 1.76 million more. Despite this, 47% of the companies analyzed in Germany have not yet deployed any AI or automation solutions in the cyber security area. So there is significant potential here to significantly shorten detection and remediation times and also reduce the cost of data leaks.
Ransomware attacks should not be kept quiet
Some companies surveyed are still reluctant to involve law enforcement in the event of a ransomware attack, believing that this would only complicate the situation. This year, for the first time, the IBM report took a closer look at this issue and proved otherwise. For the companies analyzed that did not involve law enforcement, the average time period of data leaks worldwide was 33 days longer than for those that did involve law enforcement – and that silence came at a cost. The ransomware victims studied who did not engage law enforcement paid an average of $470,000 (approximately EUR 418,000) more than those who did.
Despite ongoing efforts by law enforcement to work with ransomware victims, globally 37% of the companies analyzed chose not to engage them. In addition, nearly half (47%) of all ransomware victims studied reportedly paid the ransom. It’s clear that enterprises should clear up these misconceptions about ransomware. Paying ransom and not engaging law enforcement only drives up damage costs and delays response.
Cybersecurity teams rarely detect breaches themselves
There has been some progress in threat detection and mitigation. According to IBM’s 2023 Threat Intelligence Index, cybersecurity teams were able to fend off a greater percentage of ransomware attacks last year. However, attackers are still finding ways to slip through gaps in defenses. The report found that globally, only one in three incidents studied was discovered by the company’s own security teams or tools, while 27% of data leaks were first discovered by the attacker and 40% by a neutral third party such as law enforcement.
For companies that discovered the data leaks themselves, the cost per incident was nearly $1 million (about EUR 890,000) less than for companies discovered by an attacker ($5.23 million versus $4.3 million, or about EUR 4.65 million versus about EUR 3.82 million). Data leaks discovered by the attacker also had an almost 80-day longer duration (320 vs. 241 days) compared to companies that discovered the incident internally. The significant cost and time savings resulting from early detection show that investing in these strategies would pay off in the long run.
Other findings from IBM’s 2023 report include:
- Diverse environments affected – In Germany, 41% of the incidents analyzed resulted in a data breach across multiple platform types, including public cloud, private cloud and on-premise. This then also resulted in higher costs of EUR 4.56 million on average. This is also in line with the global results.
- The DevSecOps Advantage – In Germany, companies using a DevSecOps approach were able to reduce the cost of data leaks by an average of EUR 300,780.
Additional Sources
- Download the full 2023 report here https://www.ibm.com/security/data-breach
- Read more about the report’s key findings in this IBM Security Intelligence blog.
- Register for the IBM Security Cost of a Data Breach Webinar 2023 on Tuesday, August 1, 2023, at 5:00 p.m. CEST here.
- Connect with the IBM Security X-Force team for a personal overview of the findings https://ibm.biz/book-a-consult.
- More information on the report’s recommendations can be found here: Cost of a Data breach Action Guide.
About IBM Security
IBM Security supports the world’s largest enterprises and governments with an integrated portfolio of security products and services that feature dynamic AI and automation capabilities. The portfolio, backed by IBM’s world-renowned Security X-Force® research, enables organizations to anticipate threats, protect data as it moves, and respond quickly and accurately without hindering business innovation. Thousands of organizations trust IBM as their partner to assess, strategize, implement and manage security transformations. IBM operates one of the world’s most comprehensive security research, development and delivery organizations, monitors more than 150 billion security events every day in more than 130 countries, and has been awarded more than 10,000 security patents worldwide.
[1] The 2023 Cost of a Data Breach Report ,conducted by Ponemon Insitute, is sponsored and analyzed by IBM Security.
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Further links
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Graphic: IBM
