Ponemon Institute and ObserveIT have released The 2018 Cost of Insider Threats: Global Study, on what companies have spent to deal with a data breach caused by a careless or negligent employee or contractor, criminal or malicious insider or a credential thief. While the negligent insider is the root cause of most breaches, the bad actor who steals employees’ credentials is responsible for the most costly incidents.
The first study on the cost of insider threats was conducted in 2016 and focused exclusively on companies in the United States. In this year’s benchmark study, 717 IT and IT security practitioners in 159 organizations in North America (United States and Canada), Europe, Middle East and Africa, and Asia-Pacific were interviewed.
According to the research, if the incident involved a negligent employee or contractor, companies spent an average of $283,281. The average cost more than doubles if the incident involved an imposter or thief who steals credentials ($648,845). Hackers cost the organizations represented in this research an average of $607,745 per incident.
Here are the main findings of the research:
Imposter risk is the most costly.
The cost ranges significantly based on the type of incident. If it involves a negligent
employee or contractor, each incident can average $283,281. The average cost
more than doubles if the incident involves an imposter or thief who steals credentials
($648,845). Hackers cost the organizations represented in this research
an average of $607,745 per incident. The activities that drive costs are: monitoring &
surveillance, investigation, escalation, incident response, containment, ex-post
analysis and remediation.
The negligent insider is the root cause of most incidents
Most incidents in this research were caused by insider negligence. Specifically, the careless
employee or contractor was the root cause of almost 2,081 of the 3,269 incidents reported. The
most expensive incidents are due to imposters stealing credentials and were the least reported.
There were a total of 440 incidents involving stolen credentials.
Organizational size and industry affects the cost per incident
The cost of incidents varies according to organizational size. Large organizations with a
headcount of more than 75,000 spent an average of $2,081 million over the past year to resolve
insider-related incidents. To deal with the consequences of an insider incident, smaller-sized
organizations with a headcount below 500 spent an average of $1.80 million. Companies in
financial services, energy & utilities and industrial & manufacturing incurred average costs of
$12.05 million, $10.23 million and $8.86 million, respectively
All types of threat of insider risks are increasing.
Since 2016 the average number of incidents involving employee or contractor negligence has increased from 10.5 to 13.4. The average number of credential theft incidents has tripled over the past two years, from 1.0 to 2.9.
Employee or contractor negligence costs companies the most.
In terms of total annual costs, it is clear that employee or contractor negligence represents the most expensive insider profile. While credential theft is the most expensive on a unit cost basis, it represents the least expensive profile on an annualized basis.
It takes an average of more than two months to contain an insider incident.
It took an average of 73 days to contain the incident. Only 16 percent of incidents were contained in less than 30 days.
We conclude that companies need to intensify their efforts to minimize the insider risk because of rising costs and frequency of incidents. Since 2016 the average number of incidents involving employee or contractor negligence has increased from 10.5 to 13.4. The average number of credential theft incidents has tripled over the past two years, from 1.0 to 2.9. In addition, these incidents are not resolved quickly.
Click here to read the rest of this study.