Data breaches cost firms an average of USD $677 million

ExtraHop has released a new report examining the financial repercussions of data breaches on publicly traded companies.

The report reveals that a data breach costs an organisation an average of USD $677 million, significantly more than previous studies had indicated.

The research draws on various data sources, including SEC filings, stock performance, and quarterly earnings, offering a more comprehensive understanding of the financial ramifications of data breaches.

Results from the report show that the stock prices of companies affected by data breaches typically fall by an average of seven percent within a month following the breach.

This decline underscores the broader financial impacts on both the companies and their shareholders.

Raja Mukerji, Co-founder and Chief Scientist at ExtraHop, commented: "Data breaches have profound impacts that are wildly underestimated by organizations until they find themselves in the middle of one."

"It's important for business leaders to recognise that no organisation is immune to cyberattacks or the potential financial fall-out that comes with them — nor can they be too prepared. Bad actors have experienced great success to date using the most basic tactics and techniques, highlighting a great need for organisations to re-evaluate their cyber risk and resilience postures."

The report highlights a particularly costly breach where the affected company is estimated to face expenses amounting to USD $2.8 billion.

These costs include lost revenue, business disruptions, incident response, and remediation efforts following a ransomware attack that compromised the personal information of over 100 million customers.

Findings indicate that unauthorised access accounted for nearly half of the breaches examined, pointing to the necessity for enhanced network visibility to promptly detect and address suspicious activities.