How to Mitigate the Cost of a Data Breach

Every year, data breaches grow exponentially, making it more likely, that businesses of all sizes will suffer one. According to IT Governance, over 8 Billion records were breached in 2023.

There are a number of ways that breaches hurt businesses. First, there is the immediate cost of remediating the breach. Add the costs associated with lost productivity, lost customer trust, and lost business. Then, add the potentially extensive legal costs and penalties associated with a breach which can also be incurred and you’re looking at a ton of lost money.

Typically, the smaller the company, the smaller the costs, but data breaches are more devastating to Small & Mid-size Businesses (SMBs), since they generally don’t have the same resources that larger companies do to offset or absorb all those costs.

It is estimated that 60% of small companies go out of business within six months of a data breach.

But there is no need to resign yourself to the impending doom of a data breach. There are some proven tactics you can use to mitigate the costs. These Cybersecurity practices can limit the damage of a cyberattack.

Here are some things you can do to bolster your cybersecurity strategy. Make sure you heed the advice in the following tips:

1) Implement a Hybrid Cloud Approach

Data storage and business processes are the most common reasons companies use the cloud, but people tend to think that it’s automatically safe if it’s in the cloud. Not so. Researchers found that over 80% of breaches involved data stored in the cloud. No cloud host guarantees the safety of your data, so security in the cloud is ultimately your responsibility, and often security measures are nullified by cloud misconfiguration. No matter how you go about setting up the cloud, remember that all cloud strategies are not created equally.

Data breaches in the public cloud cost significantly more than those in a hybrid cloud. What is a hybrid cloud? It means that some data and processes are in a public cloud, and some are in a private cloud environment, generally based on importance.

Using a hybrid cloud approach is better than going 100% private cloud.

IBM issued a report showing the average global cost of a data breach for all three cloud models:

Public (many users/clients):                         $5.02 million
Private (one user/client):                              $4.24 million
Hybrid (public and private clouds):           $3.80 million

2) Create an IR (Incident Response) Plan & Practice It

An Incident Response plan is a very small part of an overall Backup & Disaster Recovery plan. Even the smallest of businesses should have these plans in place. The IR plan is simply a set of instructions for employees to follow should any number of security incidents occur.

For example, in the case of a ransomware attack, the first step should be disconnecting the infected device. Then you proceed with wiping the affected device clean and restoring the data from reliable backups. IR plans improve the speed and effectiveness of a response in the face of a security crisis.

Employing a practiced incident response plan reduces the cost of a data breach, lowering it by an average of $2.66 million per incident.

3) Use a Zero Trust Security Approach

A zero trust strategy consists of implementing a collection of security protocols that work together to fortify a network. A few examples:

Multi-factor authentication

Application safelisting

Contextual user authentication

Have you instituted a zero trust approach? If not, you are among the approximately 79% of critical infrastructure organizations that also haven’t adopted zero trust, which is a layered approach to security that some feel is cumbersome and inconvenient. Doing so can significantly reduce data breach costs. Organizations that don’t deploy zero trust tactics pay about $1 million more per data breach.  Ask yourself this question:

Is a little inconvenience worth a million dollars?

4) Adopt Tools with Security AI & Automation

Having the right security tools in place can drastically lower the cost incurred during a data breach. Tools that deploy security AI and automation in the event of a breach bring the biggest cost savings.

The expenses involved in a data breach are lowered an average of 65.2% thanks to security AI and automation solutions. These types of solutions include tools like advanced threat protection (ATP). They can also include applications that hunt out threats and automate the response. Any decent Managed Services Provider (MSP) will have these tools in place – they save you money and they save them a headache.

How do you build cybersecurity resilience?

The preceding tips on how to contain and lower data breach costs are simply best practices. You can get started by taking them one at a time and rolling out upgrades to your overall security strategy.

Work with a trusted Managed IT Services provider to create a security and defense roadmap. Address the ‘low-hanging fruit’ first, then move on to longer-term projects.

An example of addressing ‘low-hanging fruit’ would be putting Multi-Factor Authentication (MFA) in place. It’s low-cost and easy to initiate. It also significantly reduces the risk of a cloud breach.

A longer-term project might be creating an Incident Response plan at least, and a Backup & Disaster Recovery plan at best – IF you don’t already have them. Then, you would set up a schedule to have your team drill on the plan regularly. During those drills, you could work out any kinks and make improvements. These plans need to be modified and updated as conditions change.