IBM Report Reveals $4.35mm Average Cost of Data Breach in 2022
Data breaches have long been a source of major concern for businesses worldwide. With the increasing digitalization of business operations and the surge in cybercrime, this concern has grown exponentially. A recent report by IBM, compiled in collaboration with Ponemon Institute, sheds light on the current costs of data breaches, revealing sobering new statistics.
According to the IBM 2022 Cost of a Data Breach report, the average cost of a data breach reached an all-time high, averaging $4.35 million in 2022. This figure represents a 2.6% increase from 2021, when the average cost was $4.24 million. The upward trend is even more visible when compared to the 2020 report, where the average cost was $3.86 million, highlighting a 12.7% increase over the two-year period.
“The new numbers are a wake-up call to businesses worldwide. Not only are data breaches becoming more common, but they’re also becoming more costly,” says the report. “The increase in the average cost of a data breach indicates that cyber threats are not just a fleeting issue but a persistent and escalating risk for organizations.”
The report also revealed that a significant majority of organizations have been victim to more than one data breach. Eighty-three percent of organizations studied had experienced multiple data breaches, while only 17% stated this was their first encounter. The effect of these breaches had tangible business impacts, with 60% of organizations reporting that they increased the price of their services or products as a direct result of the breach.
Critical infrastructure organizations – those operating in sectors such as financial services, industrial, technology, energy, transportation, communication, healthcare, education, and the public sector – were found to be hit even harder. The average cost of a data breach for these organizations was $4.82 million, a full $1 million more than the average cost for organizations in other industries. “The cost difference underscores the high-stakes nature of breaches in critical infrastructure sectors, where the implications can be far-reaching,” the report notes.
Interestingly, the study also highlighted the value of investing in advanced cybersecurity measures, such as security AI and automation. Organizations with fully deployed security AI and automation experienced a significantly lower cost associated with data breaches, averaging $3.05 million less than those without these technologies. This 65.2% difference in cost starkly illuminates the importance of such technology in safeguarding against breaches.
Furthermore, these organizations also experienced a shorter time to identify and contain the breach – a period known as the breach lifecycle – averaging 74 days less than organizations without security AI and automation. That’s 249 days versus 323 days. “The use of security AI and automation is proving to be a game-changer in reducing the impact and cost of data breaches,” the report states.
In conclusion, the IBM 2022 Cost of a Data Breach report paints a clear picture of the growing costs and risks associated with data breaches. As businesses continue to digitalize, investing in advanced security measures such as AI and automation is no longer an option, but a necessity.