The Real Cost of a Data Breach in 2022

The cost of ransomware attacks grows each year and is more costly than ever.

Cost of a Data Breach In 2022

Hackers have been around for decades, but the frequency of their attacks is on the rise. These days, they are better funded and more organized than ever before. This means that attacks are causing more damage and costing more money to businesses all over the world. Cybersecurity companies are doing all they can to protect their customers, but hackers seem to always find a way to find their way around even the best defenses. 

Data breaches are especially damaging to businesses because they are not only costly due to repairs to the networks, but they cost money in many other ways too. The many different types of cyberattacks can range in the amount of damage they can cause, but the most popular attacks are the ones costing companies the most. 

This article will go over some of the key statistics involving the cost of data breaches and the methods that are causing the most financial damage. Knowing what you are up against is the first step in defending yourself from the growing number of cyber threats that exist today.

Ransomware breach costs

As ransomware becomes one of the most serious cyber threats around, the cost of these attacks grows each year. Ransomware as a whole cost the world $20 billion in 2021. This number is expected to reach an estimated $265 billion by 2031. This rate is staggering but experts see no reason to doubt the predictions.

Ransomware attacks are when a virus gets uploaded to a network unnoticed and then quietly encrypts a number of sensitive files and functions of the network. Once it locks all of the vital data, a screen will show the user that they have been hacked and need to pay a ransom to get their files decrypted. Even if the ransom is paid, the hackers will often leave the files encrypted regardless. The average cost of a ransomware attack in 2021 was $4.62 million according to the IBM data breach report. 

This goes far beyond just the ransom the hackers demand. This factors in the amount of lost business, network repair costs, and often decryption costs as well. Lost business, alone, accounts for an average total cost of $1.59 million. When the average lifecycle of a data breach is 287 days, the loss can be catastrophic.

Ransomware is a rapidly growing threat to businesses that hold high volumes of customer data. According to Verizon’s Data Breach Investigations Report, 24% of malware-based attacks ended up being ransomware attacks. With over 1,000 data breaches happening in 2021, the chances of being a victim of ransomware are on the rise.

Data breach costs

Data breaches can occur in a variety of ways. Sometimes, they can happen simply from a sensitive database being mishandled. This is what happened to CVS Health in June of 2021 when a third-party vendor accidentally posted a 204 GB database containing over a billion search records and sensitive customer data. 

The average cost of a data breach in 2021 was $4.24 million, just slightly lower than the average cost of a ransomware attack specifically. This cost comes from all of the investigations and fines incurred when a company fails to protect its customer data as promised. With this loss of customer trust, companies are often also forced to spend big money on marketing campaigns to ease the minds of affected customers. 

Medical establishments pay 64% more on advertising the two years following an attack. Reports like this show that your troubles with an attack are far from over when the attack itself has been handled. According to the IBM report, 39% are incurred more than a year after the attack takes place. Data breaches cause serious harm to a business and take years to fully recover from. This problem is amplified even more for small businesses. 

Verizon reported that 43% of data breaches involved small businesses. This means that hacking organizations – 36% of breachers are connected to organized crime – are targeting small businesses to make a quick buck. Small businesses have fewer resources to defend against well-funded well-organized hackers, and the hackers are more aware of this than anyone. 

Notable data breaches in 2021

2021 saw a number of notable data breaches that affected millions of people. Here are a few of the most noteworthy attacks and the extent of the damage they caused.

  1. The California Department of Motor Vehicles reported a data breach in February of 2021. It came when their billing contractor, Automatic Funds Transfer Services, was the victim of a ransomware attack. The attack compromised 20 months worth of California driver information including names, addresses, and Vehicle Identification Numbers.
  2. T-Mobile reported an undisclosed number of customers falling victim to SIM swapping attacks that saw attackers switching active numbers to SIM cards they owned to gain access to bank accounts and other sensitive customer information date of birth and Social Security Numbers.
  3. In early April, 533 million Facebook users had their personal information posted to a free hacking forum. The information included full names, phone numbers, email information, and biographical information.
  4. GEICO reported an attack in April that compromised an undisclosed number of customers’ information. Insured drivers were fooled into giving out driver’s license numbers via an unauthorized sales function on their website. The attackers had access to the information from January 1-March 21st.
  5. In late August, Microsoft Power Apps exposed up to 38 million records. Beyond just affecting Microsoft, the attack affected American airlines and J.B. Hunt and the governments of Illinois, Maryland, and New York. Compromised data included vaccination records, social security numbers, and email addresses. 

What can you do about data breaches?

As with any cyber attack, the best defense is prevention. Staying up to date on best security practices and compliance regulations makes a huge difference in deterring potential data breaches. Utilizing Zero Trust security access models showed to save up to $1.76 million dollars in the event of a data breach. Zero Trust practices are when a company secures each and every access point and their users to be continuously authenticated, authorized, and monitored. This provides protection from both internal and external threats.

Staying up to date with compliance regulations is another major factor in preventing data breaches. Organizations with a high number of compliance failures saw the costs of their data breaches average out at $5.65 million dollars, $1.41 million dollars higher than the average cost of data breaches as a whole. 

Finally, security automation showed great value in saving time and minimizing cost when it comes to data breaches. For companies with fully integrated automated security, saved an average of $3.81 million dollars compared to companies that had no automated security measures. Automated security systems also showed the capability to identify and contain breaches up to 77 days faster than companies that weren’t utilizing automated security.

Again, the best method of defense is prevention. Trava Security offers a range of solutions to help you identify where your security is lacking and how to remedy the weak points. Tools like the vulnerability scans and risk assessments allow you to pinpoint the most likely point of entry for attackers. Contact Trava today to learn more about our security solutions.

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