The cost of data breaches is rising, and we continue to hear about massive cyber incidents that have cost companies hundreds of millions of dollars. Still, you may have your doubts about whether this could happen to you.
In my discussions with CISOs, many of them have asked questions such as these:
- What are the chances that my organization will be the victim of a cyberattack?
- Even if my organization is targeted, what could it cost me?
- Does this potential risk justify hiring cybersecurity experts and purchasing cybersecurity solutions to reduce it?
To answer these questions, it’s important to consider the following:
There’s a high likelihood that you will be breached.
Many cybersecurity experts have warned that when it comes to being attacked, “it’s not if, but when.” The evidence supports this: According to the World Economic Forum, 29% of organizations reported a material impact cyber incident in the previous 12 months. From this we can surmise that almost a third of organizations can expect to be breached this year.
The cost of a breach is higher for large organizations.
According to IBM’s Cost of a Data Breach Report 2023, the average cost of breach in 2023 was $4.45 million. However, that number rises significantly with large organizations.
Using hundreds of thousands of datapoints from insurance claims data, Ponemon and other research, including CYE’s internal data, we have determined that the average cost of a data breach for an organization with revenue of $500 million is $48.7 million, and that figure continues to rise with revenue.
The exposure for large organizations is more than $14 million.
With these figures, we can calculate exposure as follows:
Likelihood of breach (29%) x Cost of breach ($48,700,000) = Exposure ($14,123,000)
As such, the expectancy of loss for organizations with revenue over $500 million starts from $14.1 million. Of course, this figure rises as the revenue of the company rises.
Your cybersecurity insurance may not provide the coverage you need.
As explained in our recent report, the protection afforded by cyber insurance often falls significantly short of the actual costs incurred from cyber incidents. A whopping 80% of insured companies that suffered a data breach did not have sufficient coverage, and there was an average of $27.3 million of uncovered losses.
A robust cybersecurity program can help.
There are many reasons why an effective cybersecurity program can reduce exposure and ultimately be a return on investment for organizations. Investing in cybersecurity can help prevent costly breaches, protect sensitive data, help with regulatory compliance, and maintain customer trust.
Yet it’s important to remember that the numbers can vary greatly depending on the organization, the risks that each organization faces, and perhaps most importantly, how the investment in cybersecurity is spent. For example, in some cases an organization may reduce risk more by implementing a strong password policy rather than focusing on mitigating every single vulnerability.
Here’s how to know if a cybersecurity program provides ROI.
When determining whether a cybersecurity program can be a return on investment for your organization, it’s important to consider the following:
- No cybersecurity program will remove the risk of a data breach completely. The goal should be to reduce the likelihood and limit the impact of a breach. That way, when (not if) it occurs, it will cost you less than if you had done nothing to prevent it.
- A good indicator of ROI is if your investment in a cybersecurity program costs between 1-10% of your possible exposure reduction. Investments vary by industry and company size, but the median investment is about 5-6%. For example, if you can reduce your exposure by $10 million, then an investment of $500K is worthwhile.
- Ultimately, the ROI of a cybersecurity program depends greatly on its effectiveness. A superior solution will provide you with a clear understanding of your particular risk situation, where you can reduce your risk the most, and how you should prioritize mitigation.
Here’s how Hyver helps.
CYE’s optimized cyber risk quantification solution, Hyver, provides organizations with a complete view of their cyber risk by visualizing attack routes and determining how much potential breaches might cost you. With this data, CYE’s experts then create mitigation plans that close the cyber gaps that present the most risk. Finally, the team focuses on cybersecurity maturity, thus improving your overall cybersecurity readiness and capabilities.
The result is a robust cybersecurity plan that provides ROI by helping you avoid or minimize the impact of breaches, protect your reputation, and ensure business continuity.
Want to learn more about how CYE can help you save money while strengthening your cybersecurity posture? Contact us.
