London, UK; 10 February 2016 – The majority of business decision makers admit that their organisation will suffer an information security breach and that the cost of recovery could start from around $1 million. This is according to a new Risk:Value research report from global information security and risk management company, NTT Com Security launched today.
While 54% of those surveyed say information security is ‘vital’ to their business and nearly a fifth (18%) agree that poor information security is the ‘single greatest risk’, two-thirds (65%) predict that their organisation will suffer a data breach some time in the future.
Respondents estimate a breach would take nine weeks to recover from and would cost $907,053, on average – even before the cost of any reputational damage, brand erosion and lost business are taken into consideration. Decision makers estimate that around a fifth (19%) of their company’s remediation costs would be spent on legal fees, 18% on compensation to customers, 15% on third party resources and 15% on fines or compliance costs. Other expected remediation costs include PR and communications and compensation to suppliers and employees.
The survey of 1,000 non-IT business decision makers in organisations in the UK, US, Germany, France, Sweden, Norway and Switzerland shows that recent high profile data breaches are hitting home. A similar Risk:Value report carried out by NTT Com Security in November 2014 revealed that just 10% of an organisation’s IT budget is spent on information security, compared to 13% this year. Respondents also anticipated a 13% drop in revenue following a breach, compared to 8% in 2014.
According to the report, almost all respondents say they would suffer external and internal impacts if data was stolen in a security breach, including loss of customer confidence (69%) and damage to reputation (60%). One third of business decision makers also expects to resign or expects another senior colleague to resign as a result of a breach.
Garry Sidaway, SVP Security Strategy and Alliances at NTT Com Security, commented: “Attitudes to the real impact of security breaches have started to change, and this is no surprise given the year we have just had. We’ve seen household brands reeling from the effects of major data breaches, and struggling to manage the potential damage to their customers’ data – and the cost to their reputation. While the majority of people we spoke to expect to suffer a breach at some point in the future, most also expect to pay for it – whether that’s in term of remediation costs, customer confidence or possibly even their jobs.”
The report also shows that less than half (41%) of organisations have some kind of insurance to cover for the financial impact of data loss and a security breach, while 12% are not covered for either. However, over a third (35%) of respondents say they have a dedicated cyber security insurance policy, with 27% in the process of getting one. Around half (52%) have a formal information security policy in place, while 27% are in the process of implementing one.
Other survey highlights:
• Only around one in five (22%) respondents report that all of their organisation’s data is completely secure
• Consumer (57%) and business (55%) customer data are the types of data that respondents are most likely to say that their organisation needs to protect
• Three in ten (30%) respondents say that more is spent on human resources (HR) than information security
• Almost all respondents report that there would be external (98%) and internal (98%) impacts if their organisation had information stolen in a security breach
The Risk:Value Executive Summary report can be downloaded here
The Risk:Value global infographic can be downloaded here
Commissioned by NTT Com Security the research was conducted by Vanson Bourne during October and November 2015. 1,000 business decisions makers (not in IT) were surveyed in the US, UK and Germany (200 in each), and France, Sweden, Norway and Switzerland (100 in each). Organisations had more than 500 employees, but those in Norway, Sweden and Switzerland could come from organisations with at least 250 employees. There were a minimum number of responses from the financial services sector (at least 50 in UK, US, France & Germany and minimum of 30 in the other countries).
About NTT Com Security
NTT Com Security is a global information security and risk management organisation, which delivers a portfolio of managed security, business infrastructure, consulting and technology integration services through its WideAngle brand. NTT Com Security helps organizations lower their IT costs and increase the depth of IT security protection, risk management, compliance and service availability. NTT Com Security AG, is headquartered in Ismaning, Germany and part of the NTT Group, owned by NTT (Nippon Telegraph and Telephone Corporation), one of the largest telecommunications companies in the world.
For more information, visit http://www.nttcomsecurity.com.