October 6, 2015 by Canadian Underwriter
The average annualized cost of cybercrime incurred by a benchmark sample of organizations in the United States was US$15 million, a nearly 20% increase year-over-year, according to a study conducted by the Ponemon Institute and sponsored by HP Enterprise Security.
The annual 2015 Cost of Cyber Crime Study also found that the average annualized cost of cybercrime incurred by the U.S. benchmark sample represented an 82% increase since the study’s inception six years ago. The results also revealed the average time it takes to resolve a cyberattack – 46 days – has increased by nearly 30% during this same six-year period, with the average cost incurred to resolve a single attack totalling more than US$1.9 million.
The study quantifies the annual cost of cybercrime for companies across seven countries including the U.S., United Kingdom, Japan, Germany, Australia, Brazil and the Russian Federation.
The U.S. study revealed that some organizations are addressing the significant costs associated with detection and recovery by making investments in security intelligence, which has been shown to reduce response costs and provide a significant return on investment.
“As organizations increasingly invest in new technologies like mobile, cloud, and the Internet of Things, the attack surface for more sophisticated adversaries continues to expand,” said Sue Barsamian, senior vice president and general manager, Enterprise Security Products, HP, in a press release. “To address this challenging dynamic, we must first understand the threats that pose the most risk and then prioritize the security strategies that can make a difference in minimizing the impact.”
As organizations strive to embrace new technologies while protecting their expanded environments, there is a need to shift security strategies from traditional network control and perimeter management to an advanced focus on protecting interactions among users, applications and data. The 2015 Cost of Cyber Crime Study demonstrates this shift; reporting organizations are now committing 20% of their security budgets to the application layer, up 33% in just two years. [click image below to enlarge]
Key findings from the U.S. study include:
• The average time to resolve a cyberattack was 46 days, with an average cost to participating organizations of more than US$1.9 million during this 46-day period. This represents a 22% increase from last year’s estimated average cost of approximately US$1.5 million, which was based upon a similar 45-day resolution period;
• The most costly cyber crimes are caused by denial of service, malicious insiders and malicious code. These accounted for more than 50% of all cybercrime costs per organization on an annual basis. Results also showed that malicious insider attacks can take longer to address, with an average of approximately 63 days to contain;
• Information theft represented the highest external cost, followed by the costs associated with business disruption. On an annual basis, information theft accounted for 42% of total external costs, while costs associated with disruption to business or lost productivity accounted for 36% of external costs (up 4% from the six-year average);
• Recovery and detection were the most costly internal activities, accounting for 55% of the total annual internal activity cost,with cash outlays and direct labor representing the majority of these costs.
Other findings include:
• Deploying a security information and event management (SIEM) solution led to an average cost savings of US$3.7 million per year, compared to companies not deploying similar security solutions;
• A “sufficient budget” can save an average of US$2.8 million in attack response and management costs;
• Employment of certified/expert security personnel can save US$2.1 million;
• The appointment of a high-level security leader can reduce costs by US$2 million;
• The percentage of participating organizations realizing cost savings from the full deployment of enabling security technologies to guard against adverse data loss included: encryption technologies at 57%, access governance tools at 45%, data loss prevention tools at 38% and policy management tools at 36%.
“With cyberattacks growing in both frequency and severity, understanding of the financial impact can help organizations determine the appropriate amount of investment and resources needed to prevent or mitigate the consequences of an attack,” said Dr. Larry Ponemon, chairman and founder, Ponemon Institute, in the release. “As seen in this year’s study, the return on investment for organizations deploying security intelligence systems, such as SIEM, realized an average annual cost savings of nearly US$4 million – showcasing the ability to minimize impact by more efficiently detecting and containing cyberattacks.”