American-Israeli cybersecurity expert, Ariel Evans confirmed in a Forbes article that cyber risk, IoT (Internet of Things) security, and cyber insurance are three of the biggest-growing fields in the cyber industry today. And when we think about it, it makes sense. She later states that, as of now, there are well over 1 billion IoT devices, with this number expected to grow fifty-fold by 2020.
To say we will be a world run by technology would be an understatement. What this means is that companies need to beef up their cyber defenses to prevent cyber breaches from occurring and the financial and reputational losses that come with them. Learn how cybersecurity can increase your return on investment (ROI), and why you may benefit from security programs Detroit.
The Price of Miscalculating Cyber Insurance
While allocating funds toward cybersecurity efforts is a step in the right direction, it isn’t enough to come up with a random dollar amount. The truth is, a miscalculation in cyber insurance can have catastrophic results, as is the case with Target.
As reported by Forbes, Target invested $100 million in cyber insurance; however, due to the breach, as of today, around $450 million has been lost. This number is expected to cross the $1-billion-mark at the end of 2017. What we can see is despite Target’s efforts in creating a layered cyber security defense, it wasn’t enough.
Hindsight is 20/20′ however, use this example as a lesson. Conduct thorough research and discuss with several cyber professionals estimates in constructing and maintaining up-to-date firewalls, intrusion protection systems, etc.
How Much Does the Average Data Breach Cost?
According to Business Insider, the average cost of a data breach is around $7 million. Know that this figure may be too low or too high for your business, especially when factoring in business size, amount of business assets, level of cybersecurity…
Also, know that breaches, according to the survey, successfully accessed personal information: names, social security numbers, medical records, financial records, or debit cards. Because of the breach, this information was at risk, with some individuals potentially having some or all personal information stolen. On top of this, the information could have been extracted either via electronic or paper form.
Besides the cost of the data breach itself, it is important to keep in mind the number of days it takes to resolve the breach. As the survey indicates, the average comes out to 46 days, with the cost being $21,155 per day.
What Other Factors Do You Have to Consider?
Calculating the ROI for cybersecurity isn’t black and white. As mentioned, other than the breach itself, you need to factor in the number of days it takes to mitigate the situation: prevent any further damage from happening, resolving the damage that has taken place, notifying the press, contacting authority figures…
That said, here are some factors you need to take into consideration. Hopefully, knowing these will put into perspective how much financial risk is on the line when a breach does occur.
Regulatory Fines May Need to Be Paid
If you have a breach, you may need to pay regulatory fines to the Federal Communications Commission, Health and Human Services, Payment Card Industry Data Security Standard, and other agencies.
If you are in the healthcare industry, you may need to contact and discuss next steps with the Office for Civil Rights and/or the Office of E-Health Standards and Services within the Centers for Medicare & Medicaid Services. Both agencies are responsible for enforcing the Health Insurance Portability and Accountability Act (HIPAA).
Time Taken to Deal with the Breach
Time is money. While you can say you’ll focus on recovering and growing your business, the truth is, you will need to allot time to deal with the breach itself. Instead of working on getting new customers and increasing your profit, you will have to deal with the press and branding efforts to curtail extensive financial loss.
Other than regulatory fines and time, you need to factor in potential lawsuits, notification and repair costs, plus other miscellaneous costs that may come up. What this shows is that a data breach is no small financial loss, and that taking a proactive stance in fending off cyber threats can increase your ROI and prevent unnecessary outlays of money and costly lost time. What have you done to stave off cyber threats?
Security Programs of Detroit Can Help
CBI, security programs of Detroit, can provide cyber advice and know-how. Contact CBI to learn more.