Pulling the reins on data breach costs

[Audrey McNeil <audrey () riskbasedsecurity com>]

http://www.networkworld.com/news/2014/021914-pulling-the-reins-on-data-278911.html?source=nww_rss

For years enterprises have battled to prevent and manage data breaches, yet
the costs associated with data breaches keep climbing higher -- especially
for organizations in highly regulated industries. The average cost of a
breach today is $188 per record in the U.S, According to the Ponemon
Institute, with the total costs of data breach hitting upwards of $5.4
million. Also according to Ponemon average losses are up 18% from the same
survey in the prior year.

Our own Global Information Security Survey finds that breach costs are
rising, as well, especially for those organizations with less mature
security programs.

Is there anything organizations can do to curb rising breach costs? Turns
out plenty. And most of it are things enterprises should already be doing.

Take the high probability of having to eventually endure a breach
disclosure, for instance. Today, nearly all states have financial data
breach notification laws, while disclosure rules for other industry
regulations such as for public companies that have breaches considered
material. Or those under the purview of the Health Insurance Portability
and Accountability Act, which also require a good portion of breaches to be
reported. Chances are, if you are breached today, you are going to have to
report.

"That leaves you with two options," says David Mortman, chief security
architect and distinguished engineer, Dell. "You can work to reduce your
chances of a breach. Second, because breaches do happen, you can protect
yourself from additional litigation due to a breach, says Mortman. And this
is where state law comes into play: they ultimately determine what
constitutes due care, and typically when an organization is breached and is
following due care they are not as exposed to successful lawsuits.

Most of those state rules can be distilled down to keeping access to the
data minimal, being able to audit access, and encrypting the data and
ensuring that the encryption keys are kept separate from the encrypted
data. "The simple solution is that if you think you have client data that
falls under that category, keep it encrypted and don't store the keys with
the data. There are not a lot of good practices out there in the world, but
that's a pretty good best practice," says Mortman.

Faster detection and response will also go a long way to minimizing costs,
explains Gene Kim, independent director at the Energy Security Consortium,
and co-author of The Phoenix Project: A Novel About IT, DevOps, and Helping
Your Business Win. "We find that in high performing organizations, when it
comes to information security, they have the ability to find and resolve
issues within hours and days versus months or quarters. I think this is
validated by the Verizon Data Breach Investigations Report, where the
actual breach occurred quarters before it was detected," says Kim.

It makes sense: the more quickly enterprises can identify breaches, the
less damage the attackers can do. "In my mind, the obvious answer is to be
able to find issues faster and also be able to fix them faster," says Kim.

In fact, it isn't a matter of if, but when, most any organization can
expect to be breached. "It's almost like riding a motorcycle. Sooner or
later you are going to have an accident," says Andrew Storms, Sr. director
DevOps at CloudPassage. "It comes down to not only how well you respond,
but also what you learn from the breach," he says.

Yet, despite the number of breaches, and the numerous surveys showing the
associated rising costs, not everyone thinks the breach costs being
reported reflects reality. After all, following a breach, no organization
wants to admit that they were easily infiltrated, and if they are a public
company, or there could be tax implications associated with higher breach
costs, companies are actually motivated to push the cost of the breaches to
as high of a number as is legally possible.

"They want to make it look like they really got nailed. They want to tell
stakeholders and shareholders that they didn't perform well because they
got nailed by the attacker, and it didn't have to do with anything else
that they may have failed at executing that period," says Mortman.

Perhaps so, but data breaches are too common and every year they are
draining enterprises of capital that can be used elsewhere. So keeping
costs low entails optimizing breach identification and incident response,
minimizing the chances of breach through good security practices, and
prepping for proper response when it does occur.

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