As the amount of data collected across an organization’s information systems increases, so too does its threat surface—the number of possible points where data breaches can occur. Also called an attack surface, this threat surface has grown exponentially in recent years, due in part to the rise of remote work. Remote work has increased reliance on cloud infrastructure and led to a further proliferation of vulnerable endpoint devices. The result is that sensitive data is at greater risk than ever before.
Traditional approaches to data security are no longer sufficient in a world with increasingly common cyberattacks, ever-changing regulations, and similar challenges that are now a required cost of doing business. Instead, organizations must take a more strategic and financial approach to managing their security risks. By quantifying your security risks, you can better understand the potential impacts of data breaches and prioritize your security investments accordingly.
Here’s what you need to know about quantifying and reducing your organization’s risk, and how doing so can potentially save you millions of dollars.
Understanding Risk Quantification For Sensitive Data Breaches
Risk quantification is a process that involves assessing the likelihood and potential impact of security risks. In data security terms, this includes security events such as sensitive data breaches as well as risks like data exfiltration. This risk can then be expressed in financial terms to help organizations make data-driven decisions about the possible impacts of security incidents.
The components of risk quantification include factors that contribute to the overall picture of the sensitive data environment. These include:
- Immediate impacts to operations. What is the impact of the breach on day-to-day business?
- Estimated financial losses. How will costs be measured in both short and long terms?
- Availability of the data accessed. Does the data accessed require additional reporting requirements due to its sensitive nature?
- Integrity of the data after the breach. What are the best- and worst-case scenarios if data is unrecoverable after the breach?
Properly quantifying risk allows businesses to prioritize threats based on hard facts and analysis rather than general data and intuition. Only with a complete picture of the threat surface can businesses begin to identify and address the potential impacts of these various threats.
Financial Impacts Of Sensitive Data Breaches
Sensitive data breaches can have significant and severe financial implications. Though the data security landscape is filled with uncertainty, one indisputable fact is that a data breach will result in negative business outcomes. These impacts can be organized under one of several categories, including loss of productivity, the cost of the response, reputational damage, and regulatory penalties.
How Sensitive Data Breaches Affect Productivity
Data breaches can impact day-to-day business operations by increasing downtime and decreasing revenue. Depending on the nature of the breach, employees may lose access to critical systems, causing delays and interruptions in their workloads. Additionally, customer service teams, IT teams, and other team members may need to spend time in the days and weeks after a breach dealing with the fallout of the security event.
Why The Cost Of Data Breach Responses Is So Expensive
A data breach can be a significant expense for an organization of any size. From the initial investigation and resolution to the ongoing recovery and remediation expenses, the costs can quickly snowball. These are further compounded for breaches that are notably large or not identified for a long period of time. In either case, the number of affected individuals can play a part in determining financial repercussions.
How Data Breaches Impact Company Reputation
When customer data is compromised, it can negatively impact public perception of the company affected by the breach. Notorious breaches can damage brand reputation overall, leading to lost customer loyalty and revenue. The impact of a data breach on a company’s reputation can be long-lasting, and it may take significant time and resources to regain the trust of customers and stakeholders.
Regulatory Penalties For Data Breaches
In addition to the expenses associated with repairing damages from a data breach, a company may also be subject to significant regulatory penalties. When a breach occurs, regulatory bodies will investigate the incident further to determine if the organization is noncompliant. The penalties for noncompliance can be severe and can include fines, penalties or other sanctions.
The Role Of Risk Quantification In Mitigating Financial Impacts
By quantifying the risks associated with sensitive data and computing the potential financial impacts of a breach, organizations can better prioritize their data breach security investments. This leads to a more effective allocation of resources. However, data outputs are only as effective as the data inputs used to determine risk. To accurately quantify risks, an organization needs to be using the best data available.
The Importance Of Using Data Specific To Your Organization
While benchmark research like the IBM-Ponemon Institute Cost of a Breach Report can provide general trends and cost averages for a given industry, each organization’s risk profile and data environment will vary. Instead, by using data specific to the organization, stakeholders can better identify potential security gaps and reduce overall risk by quantifying security risk into financial terms.
The Effect Of Risk Quantification On Data Breach Costs
The Cost of a Breach Report also highlighted the considerable effect of risk quantification techniques on data breach outcomes. Organizations that prioritize risks, threats, and impacts based on risk quantification save up to $2.1 million on average data breach costs. This cost savings represents a 48.3% difference in costs compared to organizations that did not use risk quantification ($5.4 million).
Organizations that utilized risk quantification techniques also had an average breach cost of $3.3 million. While this number is still staggering and highlights the importance of a data-centric approach to security, it’s still more than $1 million lower than the global average of $4.35 million.
To summarize, failing to properly quantify your organization’s risks can potentially be a million-dollar mistake — or worse.
How Spirion’s Advanced Analytics Tools Improve Risk-Reduction Initiatives
Data breach security should be at the forefront of every CISO, risk manager, and security team leader’s mind. Fortunately, Spirion offers the tools you need to track and manage your sensitive data in our comprehensive Sensitive Data Platform.
Our SDP is an industry-leading product built to find and remediate sensitive data wherever it lives with over 98% accuracy. With Spirion SDP, you’ll have unmatched visibility into your data along with automated workflow control, accurate classification, and results you can trust. Additionally, with our newest SDP enhancements, Spirion SDV3™ and Spirion Enhanced Analytics (SEA), you’ll have even greater capacity to quantify, monitor, track, and report on your data risks.
To understand how Spirion SDP delivers the most accurate results in the industry, you need to see it for yourself. Schedule a demo today to learn more. You can also contact us for more information about our full suite of security products.