April 29, 2010

Security breaches cost UK businesses billions

by Darren Allan

A new report commissioned by Infosecurity Europe has indicated that a fresh wave of security breaches are costing UK businesses billions of pounds.

And that’s in spite of the fact that apparently, IT spending on security hasn’t diminished in the face of the recession.

The 2010 Information Security Breaches Survey, which was conducted by PricewaterhouseCoopers, showed that technology is continuing to evolve at a fast pace, with a greater use of cloud computing and social networks.

PricewaterhouseCoopers found that while both public and private sector organisations appeared to have a greater understanding of potential security risks now, most companies still remained ill prepared to actually deal with them.

Half the businesses polled said they had increased their spend on information security in the last year, and around the same percentage indicated that they planned to increase that expenditure again next year.

Many more organisations – 82% of large companies, and 75% of smaller ones – said that they assess information security risks now. That’s in comparison to a figure of 48% overall in 2008, so a massive increase.

But, and there had to be a but, despite this increased investment and awareness, more security breaches are now occurring.

In the 2008 poll, only 35% of respondents said they had been the victim of a malicious security breach in the previous year.

However, this year’s report showed that had risen to a massive 90% of large organisations, and 74% of small businesses; more than double that of 2008.

The cost and average number of those breaches was also up in 2010. Large firms averaged 15 breaches at a cost of up to £170,000 each in 2008, whereas this year, it was 45 breaches, with the costliest incident weighing in at £690,000.

Small businesses were up from 6 to 11 breaches, and nearly trebled in the cost stakes from £20,000 to £55,000.

Chris Potter, Partner, OneSecurity, PricewaterhouseCoopers, commented: “All types of breach were on the increase and a conservative estimate is that the total cost of breaches to UK business in billions of pounds is now well into double figures.”

Much of the increase in breaches is down to not only the increasing amount of malware and cyber-criminals out there, but businesses moving to new technologies such as the cloud.

As PricewaterhouseCoopers points out, while cloud computing increases quickly in popularity with businesses, the necessary security controls are lagging behind.

Or to put it another way, be careful which third-party services you use.

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