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Bryan Yurcan
Bryan Yurcan
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The True Cost of Data Breaches

The cost associated with data breaches extends far beyond just the information that was stolen.
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Cyber security and protecting customer data continues to be top of mind for not only banks, but retailers, software firms, and any company that stores valuable data. These days it seems like not a week goes by without a report of another high-profile data breach.

P.F. Chang's became the latest retailer to be targeted at the point-of-sale with credit card information being targeted at 33 locations, it was revealed this month. This followed several high profile attacks that affected Target, Neiman Marcus, and other major retailers in late 2013 and early 2014.

Of course, financial data can be targeted at more than just retail POS systems. Websites that store valuable data are targeted on a near-constant basis. Most recently, this week news broke that a Russian gang of computer hackers stole 1.2 billion usernames and passwords, exposing vulnerability in some 400,000 websites.

While data breaches are costly for retailers and for banks that have to reimburse customer losses due to fraud, there is also a significant cost to consumers as well. Overall, the true cost of data breaches is significantly higher than one would think, according to multi-factor authentication provider Authentify. The firm estimates each breach costs about $5.4 million for the affected companies.

 

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

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Becca L
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Becca L,
User Rank: Author
8/31/2014 | 7:32:37 PM
Re: Eye-opening
It seems to me that with the frequency of data breaches being so high these costs should be built into the budget.

Also, the $5 notification cost probably includes the cost of mass postage to alert customers to data breaches, and I for one would be thrilled to stop receiving these notificatioms by snail mail - they are several pages long and it's just junk. No matter how often I elect the paperless option it never stops coming! Yes, it's the smallest part of the overall data breach cost, but over an average 28,000 accounts that's serious savings.
Becca L
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Becca L,
User Rank: Author
8/31/2014 | 7:26:05 PM
Eye-opening
$188 to wrap up each customer record seems way too much. Costs of notification, card replacements, etc included, are there no wholesale savings or greater efficiencies firms could have in place?

 

 
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