International. According to data presented by Atlas VPN, the average financial damage caused by a data breach grew by around 10% year-over-year to $4.24 million in 2021. This is the highest increase in a single year since the start of the reporting period in 2015.
A breach carries many negative consequences for the company, including lost sales, a shattered reputation, data recovery costs, and potentially even employee layoffs. The record average losses may be directly related to the rapid start of remote work, as it created many new loopholes for cybercriminals to exploit.
The numbers are provided by IBM, where between May 2020 and March 2021, researchers conducted approximately 3,500 separate interviews with people from 17 countries and 537 companies that had experienced a data breach.
In 2020, a data breach caused an average of $3.86 million in monetary damages, while in 2021, the figure soared to $4.24 million, representing an increase of 9.84%. That is, these losses are at record levels since 2015.
Seven years ago, the average total cost of a data breach was $3.79 million. The lowest losses were seen in 2017, where companies suffered about $3.62 million in damage per incident.
In addition, the average cost of data leakage in the U.S. It's $9.03 million, which is the highest number globally. The Middle East ranks second, with average losses reaching $6.93 million per incident.
Looking at data breaches from the perspective of customers whose data was stolen, what dangers are they exposed to?
The study reveals that up to 44% of stolen records included some form of personally identifiable information (PII). Examples of this information include email address, social security number, full name, driver's license number, bank account number, and passport number.
Scammers who obtain this information can carry out various types of fraud, ranging from blocking your online accounts to full-blown identity theft.
Data breach costs by industry
Interestingly, financial damages vary widely depending on the industry of the company that was a victim of the data breach.
Incidents in the healthcare industry are the costliest, with losses averaging a staggering $9.23 million this year. Healthcare companies tend to store a lot of sensitive data about their customers, which may explain the high costs per breach.
The health sector also experienced one of the largest increases in monetary losses year-on-year. Damage increased from US$7.13 million in 2020 to US$9.23 million in 2021, a growth of 29.5%.
Among the five most affected industries are the financial (US$5.72 million), pharmaceutical (US$5.04 million), technology (US$4.88 million) and energy (US$4.65 million) sectors. The energy sector fell from the second most expensive in 2020 with US$6.39 million to fifth place in 2021.
On the other side of the spectrum is the public sector, where damages are around $1.93 million, but the increase since 2020 is substantial by 78.7%.
Many other industries also faced large year-on-year increases, such as media (92.1% growth), hospitality (76.2% growth), retail (62.7% growth) and consumer (42.9% growth).
The overall findings only confirm the trend we've seen last year: cybercrime damages are rising faster than ever.
Source: Atlas VPN.
