Pulling the Reins on Data Breach Costs

The costs of data breaches remains stubbornly high, but there are steps organizations can take to keep costs down.

By George V. Hulme
Wed, February 19, 2014

CSO — For years enterprises have battled to prevent and manage data breaches, yet the costs associated with data breaches keep climbing higher -- especially for organizations in highly regulated industries. The average cost of a breach today is $188 per record in the U.S, According to the Ponemon Institute, with the total costs of data breach hitting upwards of $5.4 million. Also according to Ponemon average losses are up 18% from the same survey in the prior year.

[Positioning your institution's response in the face of data breach]

Our own Global Information Security Survey finds that breach costs are rising, as well, especially for those organizations with less mature security programs.

Is there anything organizations can do to curb rising breach costs? Turns out plenty. And most of it are things enterprises should already be doing.

Take the high probability of having to eventually endure a breach disclosure, for instance. Today, nearly all states have financial data breach notification laws, while disclosure rules for other industry regulations such as for public companies that have breaches considered material. Or those under the purview of the Health Insurance Portability and Accountability Act, which also require a good portion of breaches to be reported. Chances are, if you are breached today, you are going to have to report.

"That leaves you with two options," says David Mortman, chief security architect and distinguished engineer, Dell. "You can work to reduce your chances of a breach. Second, because breaches do happen, you can protect yourself from additional litigation due to a breach, says Mortman. And this is where state law comes into play: they ultimately determine what constitutes due care, and typically when an organization is breached and is following due care they are not as exposed to successful lawsuits.

Most of those state rules can be distilled down to keeping access to the data minimal, being able to audit access, and encrypting the data and ensuring that the encryption keys are kept separate from the encrypted data. "The simple solution is that if you think you have client data that falls under that category, keep it encrypted and don't store the keys with the data. There are not a lot of good practices out there in the world, but that's a pretty good best practice," says Mortman.

[Data breach notification laws, state and federal]

Faster detection and response will also go a long way to minimizing costs, explains Gene Kim, independent director at the Energy Security Consortium, and co-author of The Phoenix Project: A Novel About IT, DevOps, and Helping Your Business Win. "We find that in high performing organizations, when it comes to information security, they have the ability to find and resolve issues within hours and days versus months or quarters. I think this is validated by the Verizon Data Breach Investigations Report, where the actual breach occurred quarters before it was detected," says Kim.

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Originally published on www.csoonline.com. Click here to read the original story.
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