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Risk

1/26/2016
09:00 PM
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Post-Breach Costs And Impact Can Last Years

SANS study examines long-term effects of breach events.

The costs and implications of data breaches go far beyond the initial incident response and customer notification costs. In a new survey out by the SANS institute, only about one third of organizations are able to remediate breaches within a week of detection and the greatest financial impact from breaches extended months and even years beyond the event for the majority of organizations.

Conducted on behalf of Identity Finder, the SANS study took an in-depth dive into the post-breach ramifications of nearly 60 organizations. Coming from a fairly distributed range of organization sizes and industries, the study shows that even after remediation, over 60% of organizations still felt the impact from breaches. Meanwhile, the greatest financial impacts were felt long after the exposure occurred. Over 40% of organizations said they felt the biggest monetary pinch one- to 12 months after the fact.

These financial shocks often come from unexpected sources. For example, some organizations may recognize that there will need to be additional resources necessary to conduct forensics investigations during breaches, but don't realize they'll have to make unplanned purchases following an incident. Approximately 57% of respondents reported having to acquire additional tools for forensics or data recovery as a result of a breach.

Additionally, breaches frequently uncover root causes that require additional controls to prevent them from happening again and to keep the regulators at bay once an event brings their focus onto an organization. Nearly three-quarters of organizations needed to divert resources to bolster the development of administrative policies, and approximately 65% had to spend extra money on training and awareness programs following a breach. Additionally, 65% of organizations had to purchase technical tools outside the normal IT budget cycle, and over 60% needed to pick up physical controls in the wake of a breach. What's more, around a third of organizations realized they needed to add or change managed services to account for increased security after a breach.

"One could argue that these controls were needed anyway and that they should not be included in an accounting of post-breach costs. After all, having proactive security policies and procedures in place is always the best defense against a breach," wrote the report's author, Barbara Filkins. However, the fact that these purchases and resource allocations were sudden and unplanned invariably means they threw off the balance of budgeting and caused disruption in the flow of IT operations -- versus taking a pre-emptive and measured approach to increasing controls.

As things stand, fewer than half of organizations carry cyber insurance for breach events, and only about a third of organizations had enough coverage to completely cover post-breach costs, according to the report.

 

Ericka Chickowski specializes in coverage of information technology and business innovation. She has focused on information security for the better part of a decade and regularly writes about the security industry as a contributor to Dark Reading.  View Full Bio

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RyanSepe
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RyanSepe,
User Rank: Ninja
1/28/2016 | 10:39:14 AM
Re: Cyber insurance?
@Dr. T (10:33:36) I agree that relying on cyber insurance to heavily can be a hindrance however not having a basic policy for cyber insurance may also be detrimental. You need to way the cost of potential data loss against the policy you wish to acquire and what you are covered for. You don't want to pay more in the long run for an insurance policy than you stand to lose in a data breach.
RyanSepe
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RyanSepe,
User Rank: Ninja
1/28/2016 | 10:36:54 AM
Re: Brand Reputation
@Dr. T (10:32:54). Precisely, its amazing how an event such as a breach can tank sales. But very understandable...once you discover the logistics behind some breaches occur simply because of a lack of security best practices such as updating software that may be EOL, patching consistently, or overlooking other simple principles.
Dr.T
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Dr.T,
User Rank: Ninja
1/28/2016 | 10:33:36 AM
Cyber insurance?
 

When we start insure our inability to secure ourselves that simply means everting will be unnecessarily expensive. Insurance industry is never a good thing for everyday individuals.
RyanSepe
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RyanSepe,
User Rank: Ninja
1/28/2016 | 10:33:07 AM
Re: Brand Reputation
Could you elaborate on your statement? Do you mean not high in count? I fail to see if this is the case how one could create accurate assumptions.
Dr.T
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Dr.T,
User Rank: Ninja
1/28/2016 | 10:32:54 AM
Re: Brand Reputation
"Brand Reputation can be a killer ..."

Completely agree. Unless you do PR well enough that may simply be end of the brand.
Dr.T
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Dr.T,
User Rank: Ninja
1/28/2016 | 10:30:49 AM
Re: Brand Reputation
Survey responders are generally not high in any surveys. This is the case in the other surveys results we have been seeing or hearing. Including political parties.
Dr.T
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Dr.T,
User Rank: Ninja
1/28/2016 | 10:28:01 AM
Re: Too small a sample size
I agree. Numbers may not be so reliable but it is still a number that was not randomly chosen. :--))
Dr.T
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Dr.T,
User Rank: Ninja
1/28/2016 | 10:25:56 AM
Prestige
Main impact is on prestige of the company, that is basically long lasting situation, people would not forget for long period of time. At the same time while we will never forget Target for example we will continue to shop there. :--))
RyanSepe
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RyanSepe,
User Rank: Ninja
1/27/2016 | 8:25:27 AM
Brand Reputation
Brand Reputation can be a killer when it comes to costs from a breach, even more so than the up front cost of that breach. If you lose the confidence of your customer/client, your competitor may get the jump on you.
RyanSepe
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RyanSepe,
User Rank: Ninja
1/27/2016 | 8:22:47 AM
Re: Too small a sample size
That's a very good point. A study is further validated by the quantity of results. A more accurate percentage can be drawn and metrics extracted from a myriad of results.
Page 1 / 2   >   >>
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