According to new research from Kaspersky Lab, safeguarding data continues to present new challenges for businesses, with the most expensive cybersecurity incidents over the last 12 months related to data protection. In an effort to enable digital transformation without compromising on security, businesses are now prioritising IT security spending. In 2018, enterprises are allocating up to27% of their IT budgets to cybersecurity, redefining the strategic role of corporate data protection.
Data breach costs rise
The 2018 state of corporate IT security economics mirrors the shifting impact of cybersecurity on the business bottom-line. With the consequences of data breaches becoming more expensive and destructive, during the last 12 months, businesses faced a disturbing reality: for SMBs in the region, the average cost of a breach reached $114K in 2018, which is 30% higher than in 2017 ($88k). For enterprises, it increased by 63%, with the average financial impact of a breach now reaching up to $965K.
The consequences of data breaches
These increasing costs are a major concern for businesses amidst today’s digital transformation wave that involves the need to operate with growing IT infrastructure. The report highlights that in the META region to date, SMBs that faced data breaches on average lost $15K on new business opportunities. Furthermore, another $15K was lost as a result of damage to credit rating and insurance premiums and $14K on improving their software and infrastructure after the breach occurred.
Enterprises in the region had similar consequences however had to spend more to recover from the breach. $144K was spent on improving software and infrastructure and the same amount of money was lost because of the damage to credit rating and insurance premiums. Unlike SMBs, enterprises also had to spend $113K on additional PR exposure, in an aim to repair the brand damage due to the incident.
Security spending on the rise, to maintain digital transformation
With the cost of IT incidents on the rise, businesses are realising that they have to prioritise cybersecurity spending if digital transformation projects are to run smoothly and securely. This is illustrated by the growth in IT security budgets for 2018, which sees enterprises spending almost a third of their IT budget ($4.8M) on cybersecurity strategies.
One of the key reasons behind this additional investment in IT security is the increased complexity of IT infrastructure (as businesses increasingly adopt cloud platforms), along with helping to improve the level of specialist security expertise.
The combination of these factors shows that businesses are really feeling the impact of IT security and illustrates the scale of the challenges they are facing, as they battle to stay secure.
“To support dynamic business changes and to increase efficiency, companies are embracing cloud and business mobility. Cybersecurity has become not just a line item in IT bills, but a boardroom issue and a business priority for companies of any size, as evidenced by companies raising their IT security budgets. Businesses expect a strong payoff as the stakes continue to get higher: besides traditional cybersecurity risks, many companies now have to deal with growing regulatory pressures, for example,” said Maxim Frolov, vice president of Global Sales at Kaspersky Lab.