Breach Costs to Surge Almost 70% in the Next Five Years

Data breach costs will increase from $3 trillion each year to over $5 trillion in 2024, an average annual growth of 11%, according to a new Juniper Research report.

In its study, “The Future of Cybercrime & Security: Threat Analysis, Impact Assessment & Mitigation Strategies 2019-2024,” the Basingstoke, England-based Juniper Research found the costs are primarily driven by growing penalties for data breaches as more regulations take effect, as well as a greater percentage of business lost as enterprises become more dependent on the digital environment.

The whitepaper noted cybercrime is increasingly sophisticated and cybercriminals are expected to use artificial intelligence, which will learn the security system behavior in a comparable method to how cybersecurity firms currently use the technology to detect atypical behavior. The research also emphasized the likely role the evolution of deep fakes (face-swapped videos), and other AI-based techniques on future social media cybercrime, will play.

Alarmingly, despite cybersecurity becoming a larger part of corporate culture, it is not necessarily gaining traction with system users. Consequently, Juniper Research said it expects security awareness training to become a progressively vital part of enterprise cybersecurity practices. Juniper suggested the gains made by increasing human awareness of cybersecurity can lead to more efficient use of cybersecurity spending, which Juniper Research expects to rise by only 8% per annum in the forecast period.

“All businesses need to be aware of the holistic nature of cybercrime and, in turn, act holistically in their mitigation attempts,” research author Susan Morrow remarked. “As social engineering continues unabated, the use of human-centric security tactics needs to take hold in enterprise security.”

Tim Erlin, vice president, product management and strategy at the Portland, Ore.-based Tripwire, said, “The EU General Data Protection Regulation is one major contributor to these projected increases. Regulations drive improvements in security through fines, which directly impact the cost of a breach.”

Erlin said regulatory fines are only effective drivers if they’re actually levied and paid in some cases. “The goal of regulatory fines is to force organizations to spend more on preventive measures by artificially tipping the scales to make breaches more expensive.”

Erlin added, “The fact is, the growth in the cost of data breaches doesn’t seem to have slowed the growth of digital business. Cybersecurity losses are a cost of doing business in the digital age.”

Franklyn Jones, chief marketing officer at the Sunnyvale, Calif.-based Cequence Security, also commented: “While $5 trillion is a staggering cost resulting from the nearly nonstop data breaches we learn about each day, there is also a significant secondary cost that we must not lose sight of.”

Jones referred to the growing number of malicious, automated bot attacks fueled by the billions of credentials stolen from these initial breaches. “Those secondary attacks, which are even harder to detect than the initial data breaches, tend to focus on business logic abuse, stolen IP and financial fraud. The cost of these types of attacks are often under-reported, but are likely in the billions of dollars.”