Half of Breached Organizations Unwilling to Increase Security Spend Despite Soaring Breach Costs

The global average cost of a data breach reached $4.45 million in 2023 – another record high and a 15% increase over the last 3 years, according to this year’s Cost of a Data Breach study, just published by IBM and conducted by The Ponemon Institute. Detection and escalation costs jumped 42% over this same time frame, representing the highest portion of breach costs, and indicating a shift towards more complex breach investigations.

According to the 2023 IBM report, businesses are divided in how they plan to handle the increasing cost and frequency of data breaches. The study found that while 95% of studied organizations have experienced more than one breach, breached organizations were more likely to pass incident costs onto consumers (57%) than to increase security investments (51%).

The 2023 Cost of a Data Breach Report is based on in-depth analysis of real-world data breaches experienced by 553 organizations globally between March 2022 and March 2023. The research, sponsored and analyzed by IBM Security, was conducted by Ponemon Institute and has been published for 18 consecutive years. Some key findings in the 2023 IBM report include:

  • AI Picks Up Speed – AI and automation had the biggest impact on an organization’s speed of breach identification and containment. Organizations with extensive use of both AI and automation experienced a data breach lifecycle that was 108 days shorter compared to studied organizations that have not deployed these technologies (214 days versus 322 days).
  • The Cost of Silence – Ransomware victims in the study that involved law enforcement saved nearly half a million ($470,000) in average breach costs compared to those that chose not to involve law enforcement. Despite these savings, 37% of ransomware victims studied chose not to bring law enforcement in.
  • Detection Gaps – Only one third of studied breaches were detected by organizations’ own security teams, compared to 27% that were disclosed by an attacker. Data breaches disclosed by the attacker cost nearly $1 million more on average compared to studied organizations that identified the breach themselves.

“Time is the new currency in cybersecurity both for the defenders and the attackers. As the report shows, early detection and fast response can significantly reduce the impact of a breach,” said Chris McCurdy, General Manager, Worldwide IBM Security Services. “Security teams must focus on where adversaries are the most successful and concentrate their efforts on stopping them before they achieve their goals. Investments in threat detection and response approaches that accelerate defenders’ speed and efficiency – such as AI and automation – are crucial to shifting this balance.”

Every Second Costs

According to the 2023 report, organizations that fully deploy security AI and automation saw 108-day shorter breach lifecycles on average compared to organizations not deploying these technologies – and experienced significantly lower incident costs. In fact, organizations that deploy security AI and automation extensively saw nearly $1.8 million less in average breach costs than organizations that didn’t deploy these technologies – the biggest cost saver identified in the report.

At the same time, adversaries have reduced the average time to complete a ransomware attack. And with 40% of studied organizations not yet deploying security AI and automation, there is still considerable opportunity for organizations to boost detection and response speeds.

To read the full report, visit IBM’s website — click here

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