A new study, 2006 Cost of a Data Breach, suggests that data breaches may be costing companies more than experts had earlier predicted.
A benchmark analysis conducted by the Michigan-based Ponemon Institute, a privacy and information management research firm and two data security providers, finds that data breaches cost companies an average of $182 per compromised record--a 31% increase over 2005. The study analyzed 31 incidents. Total cost per incident ranged from less than $1 million to more than $22 million. In addition, some 72% of respondents indicated that the cause of the data breach was because digital information was not properly protected.
"The burdens companies must bear as a result of a data breach are significant, making a strong case for more strategic investments in preventative measures such as encryption and data loss prevention," said Larry Ponemon, Ponemon's chair and founder. "Tough laws and intense public scrutiny mean the consequences of poor security are steep--and growing steeper for companies entrusted with managing stores of consumer data."