13 Apr The cost of data breaches
The total cost to a company of recovering from a single data breach reached $6.6 million in 2008, an increase of 4.5 percent from the $6.3 million cost in 2007, according to a recent benchmark study conducted by the Ponemon Institute and sponsored by PGP Corp. Lost business accounted for nearly 70 percent of a data breach (compared with 65 percent in 2007), averaging $4.6 million.
The study examined costs at 43 organizations in 17 industry sectors. Breaches included in the survey ranged from fewer than 4,200 records to more than 113,000.
Increasing customer losses have contributed to the higher lost-business costs. Between 2005 and 2008, customer churn rates grew by $64 per victim—a 38 percent overall increase. The sectors suffering the highest customer losses were health care, with a 6.5 percent average churn rate, and financial services, with a 5.5 percent churn rate.
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