Half of Breached Organisations Unwilling to Increase Security Spend Despite Soaring Breach Costs

IBM Security today released its annual Cost of a Data Breach Report, showing the global average cost of a data breach reached $4.45 million in 2023 – an all-time high for the report and a 15% increase over the last three years. Detection and escalation costs jumped 42% over this same time frame, representing the highest portion of breach costs and indicating a shift towards more complex breach investigations.

According to the 2023 IBM report, businesses are divided in how they plan to handle the increasing cost and frequency of data breaches. The study found that while 95% of studied organisations have experienced more than one breach, breached organisations were more likely to pass incident costs onto consumers (57%) than to increase security investments (51%).

The 2023 Cost of a Data Breach Report is based on in-depth analysis of real-world data breaches experienced by 553 organisations globally between March 2022 and March 2023. The research, sponsored and analysed by IBM Security, was conducted by Ponemon Institute and has been published for 18 consecutive years. Some key findings in the 2023 IBM report include:

· AI Picks Up Speed – AI and automation had the biggest impact on speed of breach identification and containment for studied organisations. Organisations with extensive use of both AI and automation experienced a data breach lifecycle that was 108 days shorter compared to studied organisations that have not deployed these technologies (214 days versus 322 days).

· The Cost of Silence – Ransomware victims in the study that involved law enforcement saved $470,000 in average costs of a breach compared to those that chose not to involve law enforcement. Despite these potential savings, 37% of ransomware victims studied did not involve law enforcement in a ransomware attack.

· Detection Gaps – Only one third of studied breaches were detected by an organisation’s own security team, compared to 27% that were disclosed by an attacker. Data breaches disclosed by the attacker cost nearly $1 million more on average compared to studied organisations that identified the breach themselves.

Elaine Hanley, Security Services, IBM Ireland, said: “Across the globe, and very similar to the UK, this report confirms what we are seeing as ordinary citizens in Ireland. Across all industries studied, customer personally identifiable information was the most commonly breached record type and the costliest. In Ireland, we are seeing a surge in phishing emails and texts in recent months.

Globally, we are seeing that firms with a smaller number of employees were disproportionally affected by higher breach costs, which in the context of Ireland, means that most of the indigent industries operating here need to pay attention to cybersecurity. Globally, we saw that only about half of those who suffered a breach actually plan to invest more in their cybersecurity programme post-breach.

The pandemic has accelerated digital transformation in Ireland, and although this can be seen as generally positive, it does incur additional cybersecurity risks. However, AI and automation had the biggest impact on speed of breach identification and containment for studied organisations. So now is the time to understand the technologies and strategies that best protect your data.”

Additional findings in the 2023 IBM Data Breach report include:

· Breaching Data Across Environments – Nearly 40% of data breaches studied resulted in the loss of data across multiple environments including public cloud, private cloud, and on-prem—showing that attackers were able to compromise multiple environments while avoiding detection. Data breaches studied that impacted multiple environments also led to higher breach costs ($4.75 million on average).

· Costs of Healthcare Breaches Continue to Soar – The average costs of a studied breach in healthcare reached nearly $11 million in 2023 – a 53% price increase since 2020. Cybercriminals have started making stolen data more accessible to downstream victims, according to the 2023 X-Force Threat Intelligence Report. With medical records as leverage, threat actors amplify pressure on breached organisations to pay a ransom. In fact, across all industries studied, customer personally identifiable information was the most commonly breached record type and the costliest.

· Critical Infrastructure Breach Costs Break $5 Million – Critical infrastructure organisations studied experienced a 4.5% jump in the average costs of a breach compared to last year – increasing from $4.82 million to $5.04 million – $590K higher than the global average.