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IBM Cost of a Data Breach Report 2021 including 500+ data breaches studied worldwide text overlayed on image of cell phone with data map from IBM report

IBM recently released the 2021 Cost of a Data Breach Report, its annual deep dive into data breach costs, as reported by 500+ companies worldwide.

The report delivers a goldmine of data, but the numbers are so big that you could be tempted to ignore them. At $4 million-and-change, the global average data breach cost doesn’t translate well if your entire annual revenue is a fraction of that number. But the report offers a lot more than worldwide averages skewed by enterprise-level breaches. To help you find real-world ways to reduce data breach costs, we combed the data for underlying causes that point to top takeaways for organizations of any size.

Read on for our top insights from the 17th version of Big Blue’s much-anticipated yearly benchmark.

Top Trends in Data Breach Costs

  • Breaches got 10% more expensive this year – That’s the largest cost jump in the last seven years of IBM studies. But that doesn’t mean everyone suffers equally when hackers strike. As described below in the list of best practices, several widely recommended cybersecurity tools make an enormous difference. For example, organizations using advanced security such as artificial intelligence and zero-trust policies saw dramatically lower costs.
  • Ransomware attacks will cost you the most (even without the ransom) – It’s not just frequency that makes ransomware so concerning. When these attacks happen, their tab runs 9% more than other data breaches, without even counting the cost of a ransom. In fact, an actual ransom payment (which we don’t recommend paying) is usually one of the cheaper line items in the cost of an attack. Make sure your ransomware defense plan is up to par.
  • Lost business devastates your bottom line – In the breakdown of a breach’s total cost, 38% comes from factors such as losing customers, enduring system downtime and acquiring new customers to replace those who lost faith in you. That’s more than the straightforward cost of detection and escalation (29% of the total). And the impact of lost business will haunt you for months, and possibly even years, to come. So when you’re considering the ROI of a cybersecurity investment, the analysis should include far more than the simple cost of restoring data.
  • Customer information is the costliest loss – Many companies think mostly in terms of losing their intellectual property, which is undoubtedly damaging. But, on average, it costs you more when hackers get access to PII (personally identifiable information), with a price of $180 per record. Depending on your organization’s size and industry, breached PII could require you to make costly public notifications to everyone involved.

Notable Risk Factors

  • Remote workers increase exposure – You’ve been hearing since the pandemic began that a remote workforce greatly expands your attack surface and puts your data onto innumerable non-company devices. This year’s report has the data to back that up. Companies that had more than 50% of their employees working remotely took almost two months longer to identify and contain breaches. And breaches cost significantly more to fix when remote workers were involved.
  • Smaller organizations still have big risks – Twenty-five percent of the companies in the study had less than 1,000 employees. The total cost of a breach for those organizations was $2.98 million, up from $2.35 million last year.
  • Hackers lurk in your system a long time – It now takes an average of 212 days to identify a breach and another 75 to contain it. That cycle is a full week longer than in last year’s study. Translation: If you discover a breach in mid-October, it means, on average, that the hackers have been in your system since January 1.

How You Can Be More Secure

  • Protect those credentials – Compromised credentials (your username/password falling into the hands of a malicious actor) accounted for 20% of all breaches. That points to training your team better on spotting phishing attempts, not sharing login credentials with others, etc.
  • Use AI and security automation – Because hackers usually get months to explore your system before you spot them, there’s a clear need for next-gen detection and response tools such as managed XDR, which leverage AI and machine learning to spot and shut down suspicious activity far more quickly. IBM’s study found that organizations that had security AI and automation in place spend 80% less handling a breach. That makes AI/automation deployment the single most effective tools for cutting costs in this year’s survey.

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  • Incident response plans pay off—significantly – Organizations with a written incident response plan and a process for regularly testing it reduced the cost of a breach by an average of 55%. This blog explains how to get started on your IR plan.
  • Zero-trust architecture works – Only 35% of the organizations in the study have deployed zero-trust in any form. But those with mature zero-trust implementations dropped their breach costs by 42%. Even an early stage zero-trust rollout cut costs by 13%.

If you’re ready to explore how the solutions identified here can protect your data—and your bottom line—contact Pratum today for a free consultation.

Human hand with x-ray showing implanted microchip

In the right circumstances, a biohacker may only need to wave their hand to break into your building or attack your network. The technology at work isn’t all that new, but its location is. It’s now shockingly easy to implant a microchip in your own body and use it to access (and potentially hack) a wide variety of devices.

During a session at the recent Secure Iowa conference, Pratum Senior Penetration Tester Jason Moulder demonstrated what’s possible in this version of biohacking. With four chips embedded in his own hands, Jason had a lot of data resting on the podium as he spoke.

How Implanted Chips Work

When Jason asked what comes to mind when you imagine implanted chips, several people shouted, “Terminator!” And they’re not wrong. Technically speaking, putting anything inorganic into your body makes you a cyborg. In simple terms, Jason said, biohacking, “Is just a desire to go beyond what you can normally do.”

But as edgy as they sound, implanted microchips are actually a simple matter of putting technology you already use under your skin instead of in your pocket. The chips use the same RFID (radio frequency ID) technology you’re familiar with in proximity cards such as your office ID or hotel room keys. RFID also pops up throughout your life in credit cards, toll booth tags, key fobs, luggage tracking in airports and more. Millions of pets carry implanted chips in case they get lost. And the medical community already leverages implantable chips with devices such as glucose-monitoring systems for people with diabetes.

The chips, which are typically not powered, communicate over short distances with the reader, and an implanted chip can carry anything a card can. That means you could use a chip to open locked doors at the office, give your boarding pass to an airport agent, buy items from a vending machine, log into a cash machine, tell your smartphone to call up a favorite website and much more.

Your own personal tastes will determine whether handling transactions with your hand sounds wildly convenient or mostly creepy. In some other countries (most famously Sweden), thousands of people have had chips implanted. A couple of years ago, Sweden’s largest chipping company couldn’t keep up with the demand.

How Chips are Implanted

The first person known to receive a microchip implant was a British scientist named Kevin “Captain Cyborg” Warwick in 1998. Today, you can join Captain Cyborg’s super friends simply by ordering your own implant kit online. Jason buys his at Dangerous Things, which offers bundles including the Ultimate Implant Bundle with three chips for $260.

If you get even remotely squeamish around needles, chip implants won’t be your jam. Kits come with plungers and large needles so you can inject the chip, which typically comes in a glass tube about the size of a grain of rice. (It’s worth noting that Dangerous Things’ web store includes several pain-management products.) Most users place the chips on the back of their hand beside the thumb for easy access to chip readers.

You can watch the implant process here, along with watching a journalist starting to realize that he may want to keep his new chip even after his experiment is over.

Jason says the chips he’s carrying around are guaranteed to last 50 years. What if you change your mind about the chip or technology makes your implant obsolete? Well, take a deep breath. Dangerous Things offers a scalpel set.

How Hackers Can Use Implanted Chips

Back in 2015, a security expert was already hacking into smartphones using an implanted chip originally designed for cattle. So without a doubt, a hacker could leverage a chip to breach a building or computer system. Again, they leverage familiar RFID technology. And Jason notes that most RFID access systems are vulnerable because most companies buy the cheapest unit that meets their compliance requirements. “Most businesses have a mentality that they’re just checking the box,” rather than truly looking for a secure solution, Jason says.

To make his point during his presentation, Jason quickly broke into a virtual hotel room by transferring the code from a proximity card onto the chip in his hand. In under five minutes, his chip produced a green light on the card reader he brought along. Then he demonstrated how he can transfer malware from his implanted chip to a phone, creating a foothold to start pivoting through the larger system connected to the phone.

You can also load scripts onto a chip, “which is where it starts becoming dangerous from my perspective,” Jason says. You can use a chip to log into a computer, open the browser and navigate to a certain site.

How Risky Are Chips Today—Really?

It’s fairly obvious that implanted chips are a bit of a novelty act at this point. You could accomplish the same things with a card or even a chip tucked into the seam of your shirt cuff, etc. But in an extremely security-conscious facility, you could envision scenarios involving extensive searches of visitors, metal detectors, etc. It’s not often that an implanted chip would represent the only way to circumvent security, but it’s not hard to imagine such a situation.

Realistically, you’re already giving away far more information than you need to worry about with chips. “If anybody really wants to find you,” Jason says, “they can just track you on social media. We use that all the time in our jobs as penetration testers because people are always tagging people, checking in at places, etc. We can build a profile of you with all that.” And, of course, nearly everyone already voluntarily carries a powerful tracking device in the shape of their smartphone.

Implanted microchips may grab attention by scratching a sci-fi itch. But whether someone is attempting to breach your system with a chip or a card, the core principles of good security still apply.

You can download a copy of Jason’s full presentation here.

If you need help reviewing the implications of chip implants and other threats for your security, contact Pratum for a free consultation.

Jason Moulder, Senior Penetration Tester, Pratum

Jason Moulder, Senior Penetration Tester, Pratum

Jason is an Offensive Security Certified Professional (OSCP) with over 10 years of technology and security experience. He has extensive experience with network and web application penetration testing, social engineering, secure security architecture, forensics, incident response, governance and compliance. Jason has worked as a consultant for many types of industries to include government (federal/state/local), financial, oil and gas, education and private sectors. Jason currently works as a penetration tester with the Managed Security Services division at Pratum, which includes managed SIEM, vulnerability scanning, and penetration testing services. Jason also holds the following certifications: CASP (CompTIA Advanced Security Practitioner), OSCP (Offensive Security Certified Professional), GREM (GIAC Reverse Engineering Malware), CPTE (Certified Penetration Testing Engineer), CDFE (Certified Digital Forensics Examiner), CDRE (Certified Disaster Recovery Engineer), ITILv3 Certified (Information Technology Infrastructure Library), P2P Marshall, and MAC Marshall.

Whether you’re answering a steady stream of cybersecurity questions or asking your own suppliers to answer them, these documents have probably become a significant part of your job in the last year. The recent flood of cyber attacks has motivated most organizations to elevate third-party risk management to a top priority in 2021.

But even if the concept just appeared on many radar screens, it’s not a new issue. Every business of the past had to decide whether critical partners (from those supplying raw materials to those delivering finished goods) could reliably fulfill their contracts and protect what was entrusted to them. But the challenge has grown massively more complex with increasing integration and sharing of critical data. Government regulations raise the bar even more with breach notification laws and other rules that can make a vendor’s security problem a legal liability for everyone in the chain.

So proactive companies are quickly spinning up ways to get proof that every partner handles data securely. At this year’s Secure Iowa Conference, Julie Gaiaschi, CEO & Co-Founder of the Third Party Risk Association reviewed the latest best practices in this quickly developing area. This post highlights top takeaways from her talk.

Julie Gaiaschi, Third Party Risk Association

Julie Gaiaschi, CEO & Co-Founder, Third Party Risk Association

Julie Gaiaschi, CISA, CISM, is the CEO & Co-Founder of the Third Party Risk Association (TPRA). She has over 14 years of technology and information security risk experience, with the last 10 years specializing in third party risk. In her role as CEO, she provides strategic direction for the non-profit, whose mission it is to further the third party risk profession through knowledge sharing and networking. She also has a passion for helping others enhance their own third party risk management programs.

Prior to co-founding the TPRA, Julie consulted on third party risk for a large bank. She also developed and led a large health payer organization’s Third Party Security program. There, she established and executed the third party risk assessment process, which included integration into the Procurement process. Prior to her role as the leader over Third Party Security, Julie was a Senior IT Auditor.

Forces Driving Change in Third-Party Risk Management

Julie highlighted several areas demanding fresh thinking about managing risk:

  • Increasingly complex threats – Everyone knows breaches are up dramatically this year, and many of the attacks are coming through third parties via software supply chain attacks such as the Kaseya breach in July 2021. That means your vendors’ security policies are, to a large extent, becoming your problem to manage.
  • Expanded reliance on third parties – It’s tempting to think that sending your data to a cloud vendor ensures someone else will take care of security for you. But Julie notes that, “Your cloud partner may provide the controls, but it’s up to you to turn those controls on properly.” Many businesses are also seeing increased exposure from heavy use of e-commerce shopping carts and payment processing.
  • New momentum for digital transformation projects –New tools such as smart predictive analysis, AI, and business process reengineering all enhance operations, but they also present a fresh set of risks to manage.
  • Additional regulatory scrutiny – State and federal laws continue to ramp up requirements for managing security and reporting breaches.

Best Practices to Remember

To effectively keep up with these changes, Julie recommends a third-party risk management program built on these five elements:

Third Party Risk Management Program Elements

As she walked through each of these core areas, Julie provided the following tips:

  • Look for hidden contracts at your company – Compiling a list of your existing contracts can be a tall order, especially since there are probably many you won’t even think of. Julie says, “When you go through the contract review stage, you may realize you have people in your organization that are clicking buttons as they do their work, which means they are often entering into contracts and don’t even know it.”
  • Visit your vendors – When you’re reviewing the security posture of key suppliers, take time to go see them. On-site visits provide essential insight into how your vendors are actually implementing what they wrote on paper. Plus, personal visits build relationships that will make your partners more inclined to spend time providing detailed answers to your questions in the future.
  • Get a voice in the contract review process –“You need a seat at the table with the team that drafts and reviews contracts,” Julie says. “You need to know the kinds of controls that need to be put into contracts, and you can suggest the kinds of alternative controls you can use if they don’t agree to your terms.” Someone with an eye for risk management can also help write contracts that include triggers related to changes in a vendor’s situation. If a supplier makes a big change like adding an offshore location, changing owners, changing data handling systems, etc. your contract may need to specify adjustments.
  • Join the business continuity/disaster response team – Your organization’s plans for recovering from data disasters have to account for your third-party relationships. Make a point of building relationships with the BC/DR crowd so that you can have a say in what goes into the plans.
  • Check the exact scope of reports you receive – Reports from SOC 2 auditors and penetration testers provide valuable insight into a system’s policies and defenses. But the reports help you only if they cover the areas you’re interested in. Read the scoping information carefully before agreeing that these reports will be sufficient.
  • Don’t overlook disengagement – Unless you want to be held hostage in a contract, you should be planning how to minimize the impact if it makes business sense to part ways with a given partner. Your disengagement plan should address issues such as ensuring all your data is returned or destroyed—and that you can validate that vendors did what they claimed.
  • Show leadership why your work matters – While the value you’re adding each week may be obvious to you, it probably isn’t to leaders who haven’t given this area much thought in the past. “If you’re starting this effort from scratch, you need metrics and reporting that show the value you’re adding,” Julie says. “Make sure they’re appropriate to the audience you’re talking to, whether those are executives, board members or a steering committee.”

You can download a copy of Julie’s full presentation here. You’ll get details such as 13 essential inherent risk questions to ask your vendors.

If you need help reviewing your third-party risk or handling questions from your customers, contact Pratum for a free consultation.

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