Indian firms lost an average ₹176 million to data breaches last fiscal

NEW DELHI: Indian firms lost a whopping ₹176 million on an average in financial year 2021-22 to data breaches, a 25% increase from ₹140 million in FY20, and up 6.6% from ₹165 million in FY21, according to a new report.

The report, titled ‘Cost of a Data Breach’, by IBM and Ponemon Research Institute, was based on real-world data breaches experienced by 550 organisations globally between March 2021 and March 2022, and said India alone saw a massive 29,500 breaches during the period, with the average per record cost of a data breach hitting an eleven-year high. 

India’s average per record cost of a data breach in 2022 stood at ₹6,100, a 3.3% increase from ₹5,900 in 2021, a 10.4% increase from ₹5,522 in 2020, the report added.

The global average cost of a data breach also reached an all-time high of $4.35 million for organisations, with breach costs increasing nearly 13% over the last two years, said the report.

“These incidents are contributing to rising costs of goods and services,” said Viswanath Ramaswamy, Vice President, Technology, IBM Technology Sales, IBM India and South Asia. He added that 60% of global businesses have raised their prices as a result of data breach, contributing to inflation, and inadvertently passing on the cost to customers. Hackers are exploiting circumstances to force organisations to pay ransoms, which is further compounded by the cyber skills shortage.

The perpetuality of cyberattacks also sheds light on the “haunting effect” data breaches are having on businesses, with the IBM report finding 83% of organisations experiencing more than one data breach in their lifetime globally.

Another factor rising over time is the after-effects of breaches on these organisations, which linger for long , as nearly 50% of breach costs are incurred more than a year after the breach. For example, the study found that post breach response costs for Indian businesses increased from ₹67.20 million in 2021 to ₹71 million in 2022, an increase of 5.65%. Other cost of data breaches come from lost business, detection and escalation.

The report also revealed that in India, industrial ( ₹9,024), services ( ₹7,085) and IT ( ₹6,900), are the top three industries that recorded highest per record costs.

The study revealed that the three primary initial attack vectors for data breach are - stolen or compromised credentials at ₹216 million, phishing at ₹206 million, and accidental data loss or lost device at ₹190 million. Increase in third party involvement, cloud migration and IoT and OT (Operational technology) environment contributed to the highest cost increase.

Other reports have also shed light on the cost of data breaches that are rising rapidly, world over, as a 2021 CyberSecurity Ventures report saw cost of data breaches increasing 10% year-over-year. The global cost of cybercrime is also spiking and could reach $10.5 trillion per year by 2025. To put the rapidly rising cost of cyberthreats in perspective, the annual cost was about $3 trillion in 2015.

Ramaswamy said that the report clears that businesses cannot evade cyberattacks. “To stay on top of growing cybersecurity challenges investment in zero-trust deployments, mature security practices, and AI-based platforms can help make all the difference when businesses are attacked,” he said.