The major financial risk that 90% of companies face in the event of data loss or theft could be significantly reduced if they were properly compliant.
The IT Policy Compliance Group today announced the availability of its latest benchmark research report titled “Why Compliance Pays: Reputations and Revenues at Risk.” According to the report, nine out of 10 firms are exposed to financial risk from data loss and theft.
These risks, which can cost organisations’ customers, reduce revenues and even cause a decline in share price, could be significantly reduced by implementing core procedural and technical controls and monitoring those controls at least once every two weeks.
Among larger enterprises, the probability of a publicly disclosed data loss is likely once every three years if the firm is currently operating as a laggard. In contrast, organisations with the best results have delayed the probability of data loss to once in every 42 years. The benchmarks show that the organisations excelling at compliance are the same firms with the least data losses and the least business disruptions from IT downtime.
“The vast majority of businesses and public institutions are still struggling with high rates of annual compliance deficiencies, resulting in business disruption, data loss and theft,” says James Hurley, principal research manager at Symantec and MD of the IT Policy Compliance Group.
“While the probability of data loss and business disruption occurring in an organisation is less a matter of ‘if’ than ‘when,’ there are a number of compliance, risk and governance practices that, if implemented correctly, could significantly reduce the frequency and impact of these events.”
According to Attrition.org’s Data Loss Database, the US has averaged almost 280 publicly exposed incidents of data theft or loss annually over the last two years. This average will likely rise given the increasing focus on data breaches by consumers, regulatory bodies and governments. According to the latest IT Policy Compliance Group report, these losses can have significant business impact.
Benchmarks show organisations experiencing a publicly reported data loss expect to see an eight percent decline in customers and revenue, an eight percent decline in the price per share for publicly traded firms, and additional expenses averaging $100.00 per lost customer record for firms experiencing publicly disclosed data losses and thefts.
The research shows that successful firms, those with the fewest data losses and thefts, are driving operational excellence in IT by improving compliance results, especially in IT general controls and IT security controls and procedures. More notable, the benchmarks show the least data loss among firms that are monitoring and measuring controls against objectives consistently, at least once every two weeks.
“An effective IT governance process with concise IT control objectives, along with the right mix of built-in IT controls, allow businesses to set policies and measure against those policies in a consistent manner,” says Everett Johnson, International President of ISACA and the IT Governance Institute. “By creating a measurable and repeatable IT compliance program, businesses are able to adequately produce data and ensure a high level of compliance.”
Based on what is working among organisations with the fewest data losses, the IT Policy Compliance Group report identifies practices that will assist businesses with improving IT compliance results, reduce business downtime, and reduce data loss and theft. These steps include:
* Implementing more and appropriate IT controls;
* Reducing control objectives, making it easier to communicate, measure and report against;
* Establishing higher standards for performance objectives;
* Encouraging a culture of operational excellence in IT;
* Conducting monitoring, measurement and reporting of controls against objectives at least once every two weeks; and
* Allocating more spend to controls automation.
In addition to spending larger percentages of the IT budget on IT security controls, the firms with the fewest undisclosed latent data losses and least number of compliance deficiencies are reallocating monies away from external contract spend towards additional funding of equipment and software, specifically targeted at automating the monitoring and measurement of controls and procedures.
According to Patrick Evans, regional director for Africa at Symantec, “this report provides supporting evidence that the appropriate additional controls are not only warranted, but essential to prevent theft and loss.”
The IT Policy Compliance Group, which was formed to conduct benchmark research and promote best practices that help IT professionals successfully address policy and regulatory compliance challenges, also announced the addition of two new members: ISACA and the IT Governance Institute.