A recent research by the Ponemon Institute has shown that the cost of a data breach runs companies $202 per compromised record, up 2.5 percent from $197 per record in 2007 and up 11 percent from 2006. The Ponemon Institute is a security research firm and it examined the costs of 43 companies that had been hit by a data breach. The study was sponsored by PGP Corp. and has released some interesting conclusions, similar to the ones from 2007.

 

The biggest effect of a breach is the cost of lost business, which accounts for 69 percent of data breach costs. Furthermore, third party data breaches are increasing, as contractors, consultants and partners are increasingly losing data. They are also more expensive - $231 per compromised record.

 

Data breaches that are experienced by first timers are more costly, it seems, as they value $243 per victim. Experienced companies-repeat data screw-ups-have the costs down to $192. As for losing customers, health care and financial services companies lose the most customers after a data breach. The health care customer churn rate is 6.5 percent, followed by the financial services, with 5.5 percent.

 

How can companies prevent data breaches? Well, 53% of respondents say that training and awareness programs prevent future breaches, as human are likely to be the weakest link in the data breach equation.

 

However, it's pretty clear for everyone that more work needs to be done in order to prevent data breaches. At the Wharton conference on Friday, chief privacy officers didn't even know were to start, even if some companies had some detailed plans and procedures. It's likely that many companies will wait to be hit by the data breach problem before they do anything about it.