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Cost of data breaches keeps rising

Cost of data breaches keeps rising

Average total cost of breaches rose to US$6.3 million in 2007

Those breaches were also more costly than other episodes, averaging an overall expense of US$231 per record, compared to US$171 per records in incidents when third parties were not involved.

In terms of vertical bias, Ponemon said that financial services companies are feeling the biggest pinch from their breaches, based largely on customer perceptions that such organizations should do a better job of protecting their data than other types of businesses, including retailers.

Financial services companies are particularly concerned with the issue of having customers abandon their online applications in favor of more traditional brick-and-mortar services, thereby driving up their overhead expenses.

Despite the fact that the cost of responding to a data breach has risen consistently over the three years that Ponemon has studied the phenomenon, the expert believes that in time the price of losing customer data will eventually fall.

The researcher said that the sheer volume of incidents will drive customers to become desensitized to the events, resulting in lowered remediation costs and business churn.

"People are already finding that it is hard to trace an incident of ID theft to a specific breach, and with the growing number of notifications they receive, they won't care as much about the problem," Ponemon said. "There seems to be a herd mentality emerging among customers that applies to the law of large numbers; if people feel they are in a pool of millions of others who have had their records stolen or lost, their thinking is that the probability of being victimized isn't as strong."


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