IBM Security has 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 3 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 organizations 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:
“Time is the new currency in cybersecurity both for the defenders and the attackers. As the report shows, early detection and fast response can significantly reduce the impact of a breach,” said Chris McCurdy, General Manager, Worldwide IBM Security Services.
McCurdy continued: “Security teams must focus on where adversaries are the most successful and concentrate their efforts on stopping thembefore they achieve their goals. Investments in threat detection and response approaches that accelerate defenders speed and efficiency – such as AI and automation – are crucial to shifting this balance.”
According to the 2023 report, studied organisations that fully deploy security AI and automation saw 108-day shorter breach lifecycles on average compared to organisations not deploying these technologies – and experienced significantly lower incident costs.
In fact, studied organisations that deployed security AI and automation extensively saw, on average, nearly $1.8 million lower data breach costs than organisations that didn’t deploy these technologies – the biggest cost saver identified in the report.
At the same time, adversaries have reduced the average time to complete a ransomware attack. And with nearly 40% of studied organizations not yet deploying security AI and automation, there is still considerable opportunity for organisations to boost detection and response speeds.
Some studied organisations remain apprehensive to engage law enforcement during a ransomware attack due to the perception that it will only complicate the situation. For the first time this year, the IBM report looked closer at this issue and found evidence to the contrary.
Participating organisations that did not involve law enforcement experienced breach lifecycles that were 33-days longer on average than those that did involve law enforcement – and that silence came with a price. Ransomware victims studied that didn’t bring in law enforcement paid on average $470,000 higher breach costs than those that did.
Despite ongoing efforts by law enforcement to collaborate with ransomware victims, 37% of respondents still opted not to bring them in. Added to that, nearly half (47%) of studied ransomware victims reportedly paid the ransom. It’s clear that organisations should abandon these misconceptions around ransomware. Paying a ransom, and avoiding law enforcement, may only drive-up incident costs, and slow the response.
Threat detection and response has seen some progress. According to IBM’s 2023 Threat Intelligence Index, defenders were able to halt a higher proportion of ransomware attacks last year. However, adversaries are still finding ways to slip through the cracks of defence. The report found that only one in three studied breaches were detected by the organisation’s own security teams or tools, while 27% of such breaches were disclosed by an attacker, and 40% were disclosed by a neutral third party such as law enforcement.
Responding organisations that discovered the breach themselves experienced nearly $1 million less in breach costs than those disclosed by an attacker ($5.23 million vs. $4.3 million). Breaches disclosed by an attacker also had a lifecycle nearly 80 days longer (320 vs. 241) compared to those who identified the breach internally. The significant cost and time savings that come with early detection show that investing in these strategies can pay off in the long run.
Additional findings in the 2023 IBM report include:
To download a copy of the 2023 Cost of a Data Breach Report, please visit: https://www.ibm.com/security/data-breach.