Cyberattacks are increasing each year in complexity and frequency, leading to a rise in the expenses of security breaches. The 2024 Cost of Data Breach Study by IBM and the Ponemon Institute provides insights into the financial ramifications of these attacks in various sectors.
The average global cost of a data breach hit a record high of $4.45 million in 2023, marking a 15% escalation over the preceding three years. This surge was primarily driven by increased expenses linked to lost business and post-breach response measures, as outlined in the report. The United States surpassed all other countries with an average breach cost of $9.48 million.
Historically, the healthcare industry has faced the greatest financial impact from breaches, with an average cost of $10.93 million, followed by the financial sector at $5.9 million. Healthcare data breaches tend to remain undetected for 213 days on average, which exceeds the general industry average of 194 days.
In recent times, there has been a concerning trend of massive breaches involving millions of records.
Distinctive obstacles and notably higher expenditures
Healthcare has consistently ranked among the most financially burdened industries when it comes to data breaches over the past ten years, with costs significantly exceeding the global average. For instance, in 2014, the total breach cost averaged $3.5 million.
The stringent data handling regulations in healthcare, such as HIPAA (Health Insurance Portability and Accountability Act), HITECH Act (Health Information Technology for Economic and Clinical Health Act), and GDPR (General Data Protection Regulation), also contribute to the industry’s elevated average breach costs.
Furthermore, the report highlighted the persistent challenge posed by breaches involving stolen credentials, which took the longest time to resolve, averaging at 292 days. Only a third of breaches were detected by internal security personnel.
The report introduced a valuable finding: Organizations leveraging automation and AI cybersecurity experienced an average cost reduction of $1.76 million compared to those without such technologies. The use of AI security and automation decreased the breach lifecycle by an impressive 108 days on average.
Enhancing cybersecurity in healthcare
The report proposes various strategies for potentially lowering the cost of data breaches. For instance, involving law enforcement in ransomware attacks resulted in an average cost reduction of nearly $1 million. Surprisingly, organizations that opted to pay ransoms did not experience significant cost savings compared to those who refrained from paying.
In addition, the manner in which data is stored plays a crucial role. Breach costs and containment durations are influenced by data storage setups. Breaches involving data distributed across multiple environments incurred higher costs and required more time for containment.
The report also recommends thorough incident response planning and testing, along with the integration of AI systems for threat detection and response, emphasizing the development of security frameworks tailored to AI projects. This includes securing training data, monitoring for malicious inputs, and utilizing AI security solutions.
Pursuing a comprehensive approach
The remediation of breaches in the healthcare sector should encompass a variety of measures, such as:
- Conducting incident response planning and testing
- Providing employee training and implementing AI and automation in cybersecurity
- Developing a risk mitigation strategy based on the data location
- Utilizing data encryption, identity and access management
- Adopting DevSecOps practices for embedding security in applications
- Utilizing tools and platforms across on-premises and cloud environments
Data breaches in the healthcare sector typically involve data spread across diverse environments, including public cloud, private cloud, and on-premises servers. Although this multi-environment storage approach caters to the complex and varied data storage requirements of healthcare entities, it poses challenges in safeguarding this information. Therefore, investing in managed security services can help healthcare organizations optimize their cybersecurity efforts.
Learn more about safeguarding your sensitive healthcare data through IBM’s identity solutions.