The IBM Security Cost of Data Breach study, conducted by Ponemon Institute, found that the average cost of a data breach in South Africa is 32.36 million ZAR, a 12 percent increase since 2016. According to the study, these data breaches cost companies on average 1,632 ZAR ($124) per lost or stolen record.
This year’s annual study was conducted in 11 countries and two regions including South Africa. When compared to other markets, organisations in South Africa saw an average cost of a data breach at 32.36 million ZAR, have direct per capita cost of 809 ZAR ($62,5) and are amongst the markets that spend 8.07 million ZAR on post data breach response.
The report also revealed that malicious or criminal attacks are the most frequent cause of a data breach in South Africa. Forty-seven percent of incidents involved data theft or criminal misuse. These types of incidents cost companies 1,903 ZAR ($147) per compromised record, compared to 1,425 ZAR ($110.2) and 1,432 ZAR ($110.8) per compromised record as a result of a breach caused by a system glitch or employee negligence, respectively.
Top factors that contributed to the increase of cost of a data breach in South Africa include compliance failures and the extensive use of mobile platforms. Companies reported that compliance failures and the extensive use of mobile platforms increased the cost of each compromised record by 79 ZAR ($6.1) and 90 ZAR ($6.9), respectively.
“Data protection continues to be a challenge as businesses hold more and more sensitive information, pushing cyber security higher up the agenda,” said Sheldon Hand, Security Business Unit Leader South Africa. “According to the study, malicious or cyber-attacks are a major cause of data breaches in South Africa. Such attacks are financially damaging and present great threat to the reputation of organisations. It is important to start looking at security hygiene measures as an opportunity to avoid falling victim to the next big security threat rather than a nuisance.”
Time Is Money: Containing Data Breaches
The study found that having an Incident Response (IR) Team in place significantly reduced the cost of a data breach to 1,494 ZAR ($115.5) per compromised record. In contrast, a third-party error increased the cost to 1,763 ZAR ($136.3) per compromised record. The speed at which a breach can be identified and contained is in large part due to the use of an IR team and having a formal Incident Response plan. IR teams can assist organisations to navigate the complicated aspects of containing a data breach to mitigate further losses.
According to the study, how quickly an organisation can contain data breach incidents have a direct impact on financial consequences. The cost of a data breach was nearly 5 million ZAR lower on average for organisations that were able to contain a data breach in less than 30 days compared to those that took longer than 30 days.
With such significant cost savings in mind, the study revealed there’s room for improvement with organisations when it comes to the time to identify and respond to a breach. On average, organisations in South Africa took 155 days to identify a breach, and 44 additional days to contain a breach once discovered.
Uncovering the Cost of a Data Breach
The annual Cost of Data Breach study examines both direct and indirect costs to companies in dealing with a single data breach incident. Through in-depth interviews with more than 410 companies in 13 countries or regions, the study factors in costs associated with breach response activities, as well as reputational damage and the cost of lost business.
“Data breaches and the implications associated continue to be an unfortunate reality for today’s businesses,” said Dr. Larry Ponemon. “Year-over-year we see the tremendous cost burden that organisations face following a data breach. Details from the report illustrate factors that impact the cost of a data breach, and as part of an organisation’s overall security strategy, they should consider these factors as they determine overall security strategy and ongoing investments in technology and services.”
Staff Writer
