2024 IBM Breach Report: More breaches, higher costs

When we hear about higher costs these days, usually it’s a reference to consumer inflation. But in this case, we’re talking about something even more sinister: the cost to organizations who suffer a data breach. 

According to IBM’s newly released Cost of a Data Breach Report 2024, the total average cost of a data breach increased by 10% over the past year, from $4.45M to $4.88M. Good news for the crooks, but bad news for everyone else. 

But that’s just the top line. Digging deeper into the report, you’ll be rewarded with a lot of really interesting and valuable details on exactly how the data on breaches breaks down across industries, types of breach, the impact of security measures, and much more.

Here we’ll highlight a few of those details, especially the ones that are most useful for IT pros who want to better understand their risk levels and find ways to manage and reduce that risk as much as possible.

Breaking down breach costs

Top drivers of total-cost increase

Out of that $4.88M total average breach cost, $2.8M came from lost business due to operational downtime and customer churn, combined with post-breach activities such as increasing staffing for customer help desks and paying higher regulatory fines. This represents the highest cost for these losses and activities recorded over the past six years.

Healthcare industry hits new record high

The healthcare industry has long been among the most intensely targeted by cybercriminals. That, combined with the highly regulated nature of the data that can be exposed in a breach, has also meant that the cost of a data breach in the healthcare industry has been the highest for 12 years. 

This year’s record high of $10.1M is 41.6% higher than in the 2020 report, and about ten percent higher than last year. 

Comparing the breach cost in the healthcare industry to the next four highest-cost industries is sobering:

• Finance: $5.97M

• Pharma: $5.01M

• Tech: $4.97M

• Energy: $4.72M

Everyone can benefit from reducing their exposure to data-breach risk, but it’s clear that healthcare organizations have by far the most to gain by hardening their security. Here’s an overview of how Barracuda can help healthcare organizations address their unique security challenges.

Malicious-insider attacks costliest

Attacks initiated by malicious insiders had the highest average cost when compared to any other vector of attack. The average cost of these types of attacks was $4.99M. 

Other higher-than-average-cost attack vectors were business email compromise, phishing, stolen/compromised credentials, and social engineering. The report’s authors speculate that this may be partly due to attackers’ use of generative AI to create more authentic-seeming emails. 

A modern email security platform like Barracuda Email Protection includes capabilities that help address many of these risks. These include AI-powered Phishing and Impersonation Protection, which can detect many highly sophisticated phishing and related attacks, and Security Awareness Training, which is proven to make users more effective at spotting and reporting even well-crafted attacks.

Security measures that help reduce costs

The report also asked respondents about their risk-reduction efforts, and correlated these to the costs that they incurred, which yielded some interesting and useful insights.

Incident response team and plan testing mean big savings

Having an incident-response (IR) team in place and regularly testing the IR plan resulted in significantly lower costs. Of the three-quarters of respondents who said they had an IR plan, 63% reported having a team and testing the plan on a regular basis. 

Those organizations had an average breach cost of $3.26M, 58% lower than the average $5.29M cost for those who did not have a team and did not test their plan. Is setting up an IR team to create and regularly test an IR plan worth the investment of resources? Clearly it is.

The value of XDR

Of the organizations studied for the report, 44% had implemented extended-detection-and-response (XDR) solutions. These organizations were able to accelerate detection and containment of data-breach incidents by about a month when compared to those without XDR. Average time to containment with XDR was 275 days, and without XDR it was 304 days. 

Consider Barracuda Managed XDR as a way to reduce your risks while also reducing your in-house cybersecurity workload.

AI and automation

The use of AI and automation was found to have several significant effects. The more areas in which AI was deployed, the greater the cost savings those organizations enjoyed.

For example, organizations that made extensive use of AI in prevention, deploying security AI and automation across their security operations center (SOC) made up two thirds of study participants, up ten percent over the previous year. When deployed in the service of prevention workflows such as attack surface management, the use of AI resulted in a $2.2M reduction in breach costs.

The extensive use of security AI and automation increased from 28% to 31% of respondents. Limited use of these technologies grew from 33% to 36%. Across the board, AI reduced the cost of breaches while also reducing the time to discovery and containment. Strikingly, this was true whether AI was used in prevention, detection, investigation, response, or any combination of those security areas.

Get the full report

There’s plenty more insight and analysis to be gained from downloading and reading the full report, so go ahead and get it here.