Study: Malicious Attacks Cost More for French Companies
Data breaches as a result of malicious activity are significantly more expensive than inadvertent breaches caused by employee negligence, according to a recent study by the Ponemon Institute, together with PGP Corporation.
The study, “2009 Annual Study: French Cost of a Data Breach,” found that for each customer record lost, it cost a company approximately 89 euros.
Currently, France does not possess a data breach notification law, so notifications only account for 4 euros of the total cost. The rest of the cost stems from ex-post response, lost business and detection and escalation of incidents.
The study surveyed 17 French companies in 11 different industries. Data breach events ranged from between 2,500 and more than 57,000 for a total cost between 400,000 euros and 6.4 million euros. The average cost of a data breach was 1.9 million euros.
The public sector incurred the lowest cost for data breaches, while the financial and pharmaceutical industries experienced the most expensive. Both sectors also experienced a higher turnover rate of customers as a result of data breaches.
“This first annual study shows that French commercial organizations in particular are being hit hard by the financial impact of data breaches,” said Dr. Larry Ponemon, chairman and founder of The Ponemon Institute. “Should the new data breach notification bill that has just been passed by the French Senate be adopted by the National Assembly, the costs associated with handling incidents will surely increase. As this is the first year we have completed the study in France and indeed the first time most of the organizations interviewed have actually calculated the financial ramifications of losing data, it will be interesting to revisit the question in a year’s time and see where and how improvements have been made.”
Malicious or criminal acts also cost significantly more than breaches stemming from employee negligence, costing an average of 138 euros and 85 euros per record respectively. Additionally, close to 60 percent of companies surveyed experienced their first data breach in 2009.
Also, more than 40 percent of breaches occurred as a result of mistakes by third parties, higher than the rate in Germany. Breaches involving a third party were also significantly more expensive.
You can view a copy of the report here
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