Data Breaches Cost Companies an Average of $4.24 Million in 2021 According to IBM

Data breaches are becoming a worrying risk for businesses. IBM’s annual Cost of a Data Breach report found that companies lost an average of $4.24 million in 2021 per incident. The figures are the highest they’ve ever been, with no sign of slowing down.

Let’s see exactly how much data breach figures are growing, why it matters, and how businesses can improve their security levels.

Data breaches are becoming more expensive

Data breaches are becoming increasingly more expensive and dangerous. 2021 saw a significant 10% increase in average data breach costs compared to 2020 and 2019, when the average costs were $3.86 and $3.92 million, respectively.


Whether the upward trend will continue in 2022 remains to be seen, but it’s hard to imagine it won’t. Halfway through the year, we’ve already seen significant attacks on some of the world’s most prominent companies.

Some factors contributing to the increase in data breach frequency and severity are:
  • Increased adaptation of cloud technologies;
  • Remote workforce;
  • Global cybersecurity talent shortage.
Data breaches aren’t only a financial burden, but a reputational one as well. In some cases, data breaches have completely destroyed the integrity of businesses, forcing them into bankruptcy.

How can companies protect themselves?

Data breaches can be devastating to businesses of any size. Let’s look at a few ways companies can improve their security posture and prevent a major data breach:

Classify data based on importance

Not all business data holds the same value. A data breach exposing your business emails is inconvenient, but one exposing financial customer data is devastating. By classifying data, businesses can understand the level of protection it requires. A good framework for data classification is the “5 Ws” - what, who, where, when, and why.

Use an encrypted cloud storage service

The cloud may be riskier than an in-house storage center, but it’s also cheaper and offers many benefits. To utilize the benefits of cloud storage for business while remaining protected from a data breach, pay close attention to the service you choose. Ensure that the service uses end-to-end encryption and is zero-knowledge. This means that your data is encrypted, and only you have access to the encryption keys.

Backup data regularly

Creating regular backups of your data is crucial in ensuring its security and integrity. Backups are essential for two main reasons:
  • They mitigate the risks of a ransomware attack;
  • They provide data integrity and allow restoration.
Backing up data can be costly and time-consuming. It’s necessary to have an exact plan for executing backups. Determine:
  • Who is responsible for backing up data?
  • What data should be backed up?
  • When and how often will backups take place?

Final thoughts

Data breach costs are growing at a concerning pace. Businesses are scrambling to improve security amid a global cybersecurity talent shortage. The increased use of cloud technologies and the adaptation of remote work are just some of the reasons data breaches are growing in frequency and severity. But by staying vigilant and adopting some cybersecurity practices, businesses can lower their chances of having a data breach significantly.
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