With an overgrowing increase of malware samples and variants (near 600 million) in this year only , the average cost of data breaches has been estimated to reach $4 million-as according to Liviu Arsene, Senior E-Threat Analyst.
Gartner, American research and advisory firm, conducted an analysis on last year data breaches stats and estimated that people worldwide will invest in information security near to $75.4 billion. Besides, the organization sees a 26 percent probability that a company will experience one or more data breaches within a 24-hour period.
How much data breaches really cost a company?
While everyone out there focuses on how much money does the company has to invest to fix a data breach and to increase their security budgets in order to block any possibility from another attack, the question that arises here is actually what is the impact on company’s’ value?
Below, we will walk you through few massive data breaches that huge organizations experienced over the last year and what were the consequences they had to face.
The massive data breach that everyone knew about is the one that Target has experienced in late 2013. Data of 70 million individuals were exposed. To fix the cost of the data breach company invested approximately $252 million. However, the company’s stock market rating wasn’t affected in long term. It took a year to get back on track and to increase their stock value as previous.
In 2015 Anthem data breach was hot topic. 78.8 million records were stolen.
When it comes to their stock market performance, the rice drooped during the time the breach happened but there was no serious drop until late 2015.
A leading supplier of corded and cordless phones and electronic learning toys experienced a data breach last year. The impact was huge – 4.9 million parents’ accounts were accessed by cyber criminals and profiles of 6.4 million children were exposed.
Looking at their stock value, during the data breach it drooped but not significantly.
This one we all know about. Famous data breach that Adobe has been affected with were 38 million customer accounts have been accessed and all their data were out – including all credit card details, personal info and others. Just looking at the lawsuits Adobe had to face their cost reached $1.1 million in attorneys’ fees and expenses and an undisclosed sum to affected users.
The very interesting part here is that the stock value of Adobe didn’t drop down even a little bit.
Value or money?
If we take a look at the above examples of massive, well-known data breaches we could see that there is no significant decrease in companies’ value. We had to keep in mind that these examples included only big companies that had enough financial back up to fix the data breach and were most probably engaged with insurance companies and policies that cover such incidents. But till when will insurance companies bear the cost of constant data breaches?!
On the other hand, small businesses don’t share the same destiny as large corporations. According to a research conducted by Centrify 66% of U.S., 75% of U.K. and 57% of German consumers are likely to stop doing business with a small organizations that have been hacked. Read more here.
Full me once, full me twice but…
A company may fix a data breach in short time and secure its stock market value but if the security gaps are not taken care of in a long term, the data breaches will occur on a regular basis and than an organization may experience a serious drop down.