Finding the Real Cost of a Data Breach!
It is not possible to find out the exact cost of data breach, however, there are two kinds of costs regarding data breach. The first type of cost is called direct cost and the other is known as indirect costs. Companies should take effective measures to make the security system strong to avoid data breach.
Every person who is directly or indirectly have linked with computer technology must be aware with the fact that a data breach is a hazardous incident. But, no one has been able to estimate the perfect loss sustained by the victim. There have been several studies to approximate the cost of data breach. The most cited study regarding data breach has been done by the Ponemon Institute. As per the report of 2009-2011, the direct cost per breached record was 59 per data breach and the indirect cost per breached record was 135. The global payment faced a breach in March 2012 that leaked the record of 1.5 million card holders. Lately it was disclosed that some number of merchant accounts have also been affected, resulting a temporary removal from the PCI list. Although in the end of the day after facing all the trouble, they were able to continue their business as before.
Let’s discuss what is direct and indirect costs are and how we categorize the both costs?
The direct costs are the expanses that are made physically by the company. These expanses found a proper place after calculation in financial books. These costs include payment of insurance, expanses paid for data protection, payments to partner, expanses made filing suit or paying fines. There can be many other direct losses which are recorded as per actual figures not by estimation. The Global Payment expensed $92.7 million till now. Out of that $92.7 million, $20 million was recouped by insurance, $35.6 million were the charges from the cards, $77.1 million was spent on ID protection and there were some other direct cost included in the loss. So adding up and subtracting the costs, it turned out that the cost of direct loss was about $62 per record.
Indirect costs does not typically exist, they are an estimation of the future loss due to the loss of people’s trust, goodwill in the market and other things. The indirect cost does not find any real place in the financial records except the goodwill which is recorded with an estimated figure. A wise businessman will rate his goodwill in the market as the most precious asset.
A businessman does not know the importance of his records until he suffers a breach. The true value of the information is discovered in the black market. Data from a well to do company can be very handy for a rival company, the competitor can spend millions of Dollars to get the inside information of the company. Except the data leakage by mistake, the evil hackers can access your computer by malware viruses and links. An email containing links can show hackers the way to their data if they are clicked. An online hacking is difficult to tackle; however, one can make his/her data on their hard drives fully secure. Using software that can Password Protect File can make all the records secure that he file contains.
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ABOUT THE AUTHOR
Tom Riddle is Marketing Manager at New Softwares.net, a data protection and Information Security company that specializes in Password Protect File Software.