Operational changes made during the pandemic often carried a steep price. Data breaches now cost companies a record $4.24 million per incident on average, according to a global survey by IBM Security.
Businesses were forced to quickly adapt their technological approaches last year, with many companies encouraging or requiring employees to work from home and 60 percent of organizations moving further into cloud-based activities.
The new findings suggest that security may have lagged behind these rapid IT changes, hindering organizations’ ability to respond to data breaches.
Remote work impact. The rapid shift to remote operations during the pandemic appears to have led to more-expensive data breaches.
Health care breach costs surged. Industries that faced huge operational changes during the pandemic (health care, retail, hospitality and consumer manufacturing/distribution) also experienced substantial increases in data breach costs year over year.
Compromised credentials led to compromised data. Stolen user credentials were the most common root cause of breaches in the study.
Modern approaches reduced costs. The adoption of AI, security analytics and encryption were the top three mitigating factors shown to reduce the cost of a breach, saving companies between $1.25 million and $1.49 million compared to those that did not have significant use of these tools.
While certain IT shifts during the pandemic increased data breach costs, organizations that said they did not implement any digital transformation projects to modernize their business operations actually incurred higher data breach costs.
The cost of a breach was $750,000 higher than average at organizations that had not undergone any digital transformation because of COVID-19 (16.6 percent higher than the average).
The report also found that more companies were deploying security automation compared to previous years, leading to significant cost savings. Around 65 percent of companies surveyed reported that they were partially or fully deploying automation within their security environments, compared to 52 percent two years ago.
“Higher data breach costs are yet another added expense for businesses in the wake of rapid technology shifts during the pandemic,” said Chris McCurdy, vice president and general manager of IBM Security.
“While data breach costs reached a record high over the past year, the report also showed positive signs about the impact of modern security tactics, such as AI, automation and the adoption of a zero-trust approach, which may pay off in reducing the cost of these incidents further down the line.”