New report looks at ‘Security breaches – what’s the real cost to your business?’

Published: Thursday, 11 February 2016 08:21

Most UK business decision makers admit that their organization will suffer from a cyber security breach at some point. They also anticipate that to recover from a data breach would cost upwards of £1.2 million on average for their organization, the highest figure globally. This is according to a new Risk:Value report from global information security and risk management company, NTT Com Security, which surveyed business decision makers in the UK, as well as US, Germany, France, Sweden, Norway and Switzerland.

While nearly half (48 percent) of UK business decision makers say information security is ‘vital’ to their organization and just half agree it is ‘good practice’, a fifth admit that poor information security is the ‘single greatest risk’ to the business, ahead of ‘decreasing profits’ (12 percent), ‘competitors taking market share’ (11 percent) and on a par with ‘lack of employee skills’ (21 percent).

Well over half (57 percent) agree that their organization will suffer a data breach at some point, while a third disagree and one in ten say they do not know. Respondents estimate that a breach would cost them £1.2m, even before ‘hidden costs’ like reputational damage and brand erosion are taken into consideration, and take on average two months to recover from. They also anticipate a 13 percent drop in revenue, on average, following a breach.

In terms of remediation costs following a security breach, nearly a fifth (18 percent) of a company’s costs would be spent on legal fees, 18 percent on fines or compliance costs, 17 percent on compensation to customers, and 11 percent for third party remediation resources. Other anticipated costs include PR and communications (14 percent) and compensation paid to suppliers (12 percent) and to employees (11 percent).

According to the report, the vast majority of respondents in the UK admit they would suffer both externally and internally if data was stolen, including loss of customer confidence (66 percent) and damage to reputation (57 percent), as well as direct financial loss (41 percent). Over a third of decision makers (34 percent) expect to resign or expect another senior colleague to resign as a result of a breach.

Other key points include:

The Risk:Value Executive Summary report can be downloaded here.

Research demographics

Commissioned by NTT Com Security the research was conducted by Vanson Bourne during October and November 2015. 1,000 business decisions makers (not in IT) were surveyed in the US, UK and Germany (200 in each), and France, Sweden, Norway and Switzerland (100 in each). Organizations had more than 500 employees, but those in Norway, Sweden and Switzerland could come from organizations with at least 250 employees.