IBM Security’s newly-released annual Cost of a Data Breach Report says that 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 three 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 latest 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 on to consumers (57%) than to increase security investments (51%).
Some other key findings in the 2023 IBM report include:
* AI picks up speed – AI and automation had the biggest impact on speed of breach identification and containment for studied organisations. Organisations with extensive use of both AI and automation experienced a data breach lifecycle that was 108 days shorter compared to organisations that have not deployed these technologies (214 days versus 322 days).
* The cost of silence – Ransomware victims in the study that involved law enforcement saved $470 000 in average costs of a breach compared to those that chose not to involve law enforcement. Despite these potential savings, 37% of ransomware victims did not involve law enforcement in a ransomware attack.
* Detection gaps – Only one-third of breaches were detected by an organisation’s own security team, compared to 27% that were disclosed by an attacker. Data breaches disclosed by the attacker cost nearly $1-million more on average compared to organisations that identified the breach themselves.
“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,” says Chris McCurdy, GM Worldwide IBM Security Services. “Security teams must focus on where adversaries are the most successful and concentrate their efforts on stopping them before 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, 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, 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 organisations 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. Add to that, nearly half (47%) of 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 versus $4,3-million). Breaches disclosed by an attacker also had a lifecycle nearly 80 days longer (320 versus 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:
* Breaching data across environments – Nearly 40% of data breaches studied resulted in the loss of data across multiple environments including public cloud, private cloud, and on-prem – showing that attackers were able to compromise multiple environments while avoiding detection. Data breaches studied that impacted multiple environments also led to higher breach costs ($4,75-million on average).
* Costs of healthcare breaches continue to soar – The average costs of a studied breach in healthcare reached nearly $11-million in 2023 – a 53% price increase since 2020. Cybercriminals have started making stolen data more accessible to downstream victims, according to the 2023 X-Force Threat Intelligence Report. With medical records as leverage, threat actors amplify pressure on breached organisations to pay a ransom. In fact, across all industries studied, customer personally identifiable information was the most commonly breached record type and the costliest.
* The DevSecOps advantage – Organisations across all industries with a high level of DevSecOps saw a global average cost of a data breach nearly $1,7-million lower than those studied with a low level/no use of a DevSecOps approach.
* Critical infrastructure breach costs break $5m – Critical infrastructure organisations studied experienced a 4,5% jump in the average costs of a breach compared to last year – increasing from $4,82-million to $5,04-million – $590 000 higher than the global average.