On average, a single cybersecurity incident now costs large businesses $861,000, says Kaspersky Lab’s report “Measuring the Financial Impact of IT Security on Businesses,” based on the 2016 Corporate IT Security Risks survey.
Meanwhile, small and medium businesses (SMB) end up paying $86,500. Most alarmingly, the cost of recovery significantly increases depending on the time of discovery.
The report says SMBs tend to pay 44% more to recover from an attack discovered a week or more after the initial breach, compared to attacks spotted within one day. Enterprises pay a 27% premium in the same circumstances.
Budget increases address complexity
In the 2016 survey, for the first time Kaspersky Lab compared an organization’s security budget to losses incurred from serious incidents. Overall, businesses expect IT security budgets to grow at least 14% over the next three years, due to the increased complexity of IT infrastructure.
A typical small business currently spends 18% of their total IT budget on security, whereas enterprises allocate 21%. The research shows a significant disparity between businesses of differing sizes, with annual security budget varying from just $1,000 for very small businesses to more than one million US dollars for large companies.
Cost of recovery: employee overtime and more
To estimate the total cost of recovery, Kaspersky Lab and B2B International asked businesses to report their losses from the most serious security incident in different categories.
Although the most frequent cost is for additional staff wages, businesses reported significant spending due to lost business opportunities, improvement in IT security, employing external specialists and hiring new staff. Enterprises spend $79K on training and $85K on requesting help from external experts – 19% of the total loss.
Talking about ROI
“Based on our worldwide survey, the average IT Security budget is ‘worth’ just 2.5 cyberattacks once all direct and indirect losses are taken into account,” comments Vladimir Zapolyansky, Head of SMB Marketing, Kaspersky Lab.
“With thousands of threats attacking the corporate world every day, an efficient cybersecurity definitely pays off. Businesses understand the threat clearly as 59% of SMBs and 62% of enterprises say they will improve their security regardless of an ability to measure returns.
“However, the survey proves that reaction time post-breach has a direct impact on financial losses. This is something that cannot be remedied via budget increases. It requires talent, intelligence and an agile attitude towards protecting one’s business.”