26th July, 2019
1 Min read
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The cost of a data breach has risen 12% over the past 5 years and now costs $3.92 million on average, according to IBM. These rising expenses are representative of the multiyear financial impact of breaches, increased regulation and the complex process of resolving criminal attacks.
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The financial consequences of a data breach can be particularly acute for small and midsize businesses. In the study, companies with less than 500 employees suffered losses of more than $2.5 million on average – a potentially crippling amount for small businesses, which typically earn $50 million or less in annual revenue.
For the first time this year, the report also examined the longtail financial impact of a data breach, finding that the effects of a data breach are felt for years. While an average of 67% of data breach costs were realized within the first year after a breach, 22% accrued in the second year and another 11% accumulated more than two years after a breach.
The longtail costs were higher in the second and third years for organizations in highly-regulated environments, such as healthcare, financial services, energy and pharmaceuticals.
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