Risk
4/28/2010
06:13 PM
George V. Hulme
George V. Hulme
Commentary
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When It Comes To Data Breaches, U.S. Most Costly

Research published today shows that the average cost of a data breach, globally, is about $3.43 million per incident and $142 per compromised record. But that's not the entire story.

Research published today shows that the average cost of a data breach, globally, is about $3.43 million per incident and $142 per compromised record. But that's not the entire story.The 2009 Annual Study: Global Cost of a Data Breach, conducted by the Ponemon Institute and sponsored by security firm PGP Corporation is the global version of the U.S. Data Breach report we covered in January.

What's interesting in this study is how it highlights that data breaches are more costly in countries that have data breach disclosure laws, such as California's SB 1386. In the U.S., all but four states have a similar law. That could be why at $204 per record, the U.S. is 43 percent higher than the global average cost for data breaches this report found.

Germany ($177 per record) had similar beach laws go into effect last July, which may explain why it is the second most costly country to experience a breach. While no such data breach disclosure laws exist in Australia ($114), France ($119), and the UK ($98) - all of their costs, cited in parentheses, were below the global average.

"The over-arching conclusion from this study is the staggering impact that regulation has on escalating the cost of a data breach," said Dr. Larry Ponemon, chairman and founder of The Ponemon Institute, in a statement. "The U.S. figures are testament to this and it's clear that, as and when breach notification laws are introduced across the rest of the world, other countries will follow the same pattern and costs will rise," he said.

Nearly half of the cost of data breaches, 44 percent, is attributable to the cost of lost business.

For security and technology observations throughout the day, consider following me on Twitter.

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