Compromised employee accounts are the most expensive root cause of data breaches. In fact, data breaches caused by compromised employee accounts cost US$1M more than the average data breach. This is based on the findings of the 2020 Cost of a Data Breach Report that IBM Security announced today.

Sponsored by IBM Security and conducted by the Ponemon Institute, the 2020 Cost of a Data Breach Report is based on in-depth interviews with more than 3,200 security professionals in organizations that suffered a data breach over the past year. This global study on the financial impact of data breaches revealed that these incidents cost companies US$3.86M per breach on average. Meanwhile, the average cost in ASEAN is US$2.71M.

Stolen credentials

As companies are increasingly accessing sensitive data via new remote work and cloud-based business operations, the report sheds light on the financial losses that organizations can suffer if this data is compromised. A separate IBM study found that over half of employees new to working from home due to the pandemic have not been provided with new guidelines on how to handle customers’ personally identifiable information, despite the changing risk models associated with this shift.

The recent Twitter hack brought to the fore the danger posed by compromised employee accounts.

The 2020 Cost of a Data Breach Report further validated this with its findings. In incidents where attackers accessed corporate networks through the use of stolen or compromised credentials, businesses saw nearly US$1M higher data breach costs compared to the global average — reaching US$4.77M per data breach.

Stolen or compromised credentials and cloud misconfigurations were the most common causes of a malicious breach for companies in the report, representing nearly 40 percent of malicious incidents. With over 8.5 billion records exposed in 2019, and attackers using previously exposed emails and passwords in one out of five breaches studied, businesses should rethink their security strategy via the adoption of a zero-trust approach — reexamining how they authenticate users and the extent of access users are granted.

The report also found that remote work risk will have a cost. With hybrid work models creating less controlled environments, the report found that 70 percent of companies studied that adopted telework amid the pandemic expect it will exacerbate data breach costs.

Advantage of automation

Another finding of the report is that smart technology slashes breach costs in half. Companies that had fully deployed security automation technologies (which leverage AI, analytics, and automated orchestration to identify and respond to security events) experienced less than half the data breach costs compared to those who didn’t have these tools deployed — US$2.45M vs US$6.03M on average.

“When it comes to businesses’ ability to mitigate the impact of a data breach, we’re beginning to see a clear advantage held by companies that have invested in automated technologies,” said Wendi Whitmore, Vice President, IBM X-Force Threat Intelligence, in a press statement.

“At a time when businesses are expanding their digital footprint at an accelerated pace and security industry’s talent shortage persists, teams can be overwhelmed securing more devices, systems and data. Security automation can help resolve this burden, not only enabling a faster breach response but a significantly more cost-efficient one as well,” she said.