IBM & Ponemon Institute Study: Average Total Cost of Data Breach Increases to INR 97.3 million

IBM Security (NYSE: IBM) has unveiled the results of a global study analyzing the financial impact of data breaches to a company’s bottom line. Sponsored by IBM and conducted by the Ponemon Institute, the study found that the total average cost paid by a company increased from 88.5 million INR to 97.3 million INR in 2016 in India.

Cybersecurity incidents continue to grow in both volume and sophistication, with 64% more security incidents reported in 2015 than in 2014.As these threats become more complex, the cost to companies continues to rise. In fact, the study has found that companies lose up to INR 3,704 per compromised record.

Breaches in highly regulated industries were even more costly: breaches in financial institutions had a per capita cost of INR 5,544 which is well above the mean of INR 3,700.

Slow Response and Lack of Planning Cost Companies Greatly

While data breaches due to third party errors or extensive migration to the cloud increase the per capita cost, according to the study, leveraging an incident response team was the single biggest factor associated with reducing the cost of a data breach – from INR 3,704 to INR 2,498 on average. In contrast, third party involvement in the cause of the data breach increased the average cost to as much as INR 4,622.

The process of responding to a breach is extremely complex and time consuming if not properly planned for. Amongst the required activities, a company must:

  • Work with IT or outside security experts to quickly identify the source of the breach and stop any more data leakage
  • Disclose the breach to the appropriate government/regulatory officials, meeting specific deadlines to avoid potential fines
  • Communicate the breach with customers, partners, and stakeholders
  • Set up any necessary hotline support and credit monitoring services for affected customers

Each one of these steps takes countless hours of commitment from staff members, taking time away from their normal responsibilities and wasting valuable human resources to the business.

Incident response teams can expedite and streamline the process of responding to a breach, as they’re experts on what companies need to do once they realize they’ve been compromised. These teams address all aspects of the security operations and response lifecycle, from helping resolve the incident, to satisfying key industry concerns and regulatory mandates. Additionally, incident response technologies can automate this process to further speed efficiency and response time.

The study also found the longer it takes to detect and contain a data breach, the more costly it becomes to resolve. While breaches that were identified in less than 100 days cost companies an average of INR 89.4 million, breaches that were found after the 100 day mark the average cost rose significantly to INR 105.6 million.

The most difficult incident to detect and contain is the malicious or criminal act (97 and 203 days), while data breaches caused by human error take the least time to identify and contain (69 and 139 days).

Analyzing the Cost of a Data Breach

The annual Cost of a Data Breach study examines both direct and indirect costs to companies in dealing with a single data breach incident. Through in depth interviews with nearly 37 companies across the country, the study factors in costs associated with breach response activities, as well as reputational damage and the cost of lost business.

“Over the many years studying the data breach experience of more than 2,000 organizations in every industry, we see that data breaches are now a consistent ‘cost of doing business’ in the cybercrime era,” said Dr. Larry Ponemon. “The evidence shows that this is a permanent cost organizations need to be prepared to deal with and incorporate in their data protection strategies.”

For more details on the study, the full global report is available on the IBM X-Force Research Library. Country-specific reports are also available for the United States, United Kingdom, Germany, Australia, France, Brazil, Japan, Italy, India, the Arabian region (United Arab Emirates and Saudi Arabia), Canada and South Africa.

This year, IBM increased its investment in the Incident Response market with the acquisition of Resilient Systems. Resilient’s Incident Response Platform (IRP) empowers security teams to analyze, respond, and mitigate incidents faster and more efficiently. The newest version of the platform, announced earlier this year, includes Resilient Incident Visualization, which graphically displays the relationships between Indicators of Compromise (IOCs) and incidents in an organization’s environment.

“The amount of time, effort and costs that companies face in the wake of a data breach can be devastating, and unfortunately most companies still don’t have a plan in place to deal with this process efficiently,” said Ted Julian, Vice President, Resilient an IBM Company. “While the risk is inevitable, having a coordinated and automated incident response plan, as well as access to the right resources and skills, can make or break how much a company is impacted by a security event.”

IBM also recently launched IBM X-Force Incident Response Services, which include consulting and managed security services to help clients manage all aspects of responding to a cyber breach.


[1] X-Force IBM Cyber Security Intelligence Index, April 2016

[2] 2016 Cost of Data Breach Study: Global Analysis, June 2016

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