Cyber Breach Cost Nears $10 Million, Raised and Decreased by AI
While the cost of cyberattacks increased 10% year-over-year (the largest annual increase since the pandemic), breach costs continued to decline due to the use of artificial intelligence and automation in defensive cybersecurity workflows, according to IBM Security’s 2024 Cost of a Data Breach Report, independently conducted by the Ponemon Institute.
The key recommendation: invest in artificial intelligence-based defenses to “address the emerging risks and opportunities of generative AI,” Kevin Skapinetz, vice president of strategy and product design at IBM Security, said in an announcement Tuesday.
AI can reduce the severity of breaches
With “extensive use,” organizations saw an average of $2.2 million less in breach costs, compared to organizations that didn’t use AI-driven defenses in their security workflows. It’s the largest cost savings in the annual study, the company said.
IBM’s benchmark study, now in its 19th year, analyzes actual data breaches at 604 organizations worldwide between March 2023 and February 2024.
The use of generative AI for business operations is growing rapidly across industries, expanding the attack surface and creating new risks for security teams.
“These expenditures will soon become unsustainable,” Skapinetz said in a statement.
In healthcare, the sector hit hardest for the 14th year in a row, data automation and AI integrations are taking advantage of electronic medical records and other systems, such as patient portals. Many vendors now offer chatbot-based access to machine learning algorithms that streamline operations and reduce the administrative and other burdens that plague the healthcare ecosystem.
The researchers found that 67% of organizations analyzed across all industries were implementing AI and automation in security – up nearly 10% year-over-year – while 20% said they were using some form of security tools that rely on machine learning.
With the increased use of AI tools in security – two out of three organizations surveyed this year are implementing AI and automation in security operations centers – they can reduce breach costs by an average of $2.2 million, the researchers found.
Law enforcement is another key to cost savings. Ransomware victims saved an average of nearly $1 million in breach costs by bringing them in.
While 70% of organizations that suffered a data breach reported that breaches caused significant disruption, the average lifecycle of a data breach globally reached a seven-year low of 258 days – down from 277 days in the 2023 report. By improving threat mitigation and remediation activities and making extensive use of security AI and automation to detect and contain cyber incidents, security teams are saving time, the researchers said in a rack.
According to the analysis, this is on average 98 days faster than organizations that do not use these technologies.
More money for tech workers
Organizations are also facing more severe staff shortages, pushing total breach costs to an average of $5.74 million for high-level shortages, compared to $3.98 million for lower-level shortages, the report.
Since last year’s survey, the shortage has increased by 26%, resulting in an average of $1.76 million more in breach recovery costs than organizations with minimal or no security staffing shortages.
As a result, more organizations said they plan to increase their security budgets compared to last year – 63% compared to 51% – to address technical resource and skills shortages.
According to the researchers, increasing employee training is one of the most important areas for investment.
Breaches that can be traced back to gaps in data visibility
The breaches that took the longest to identify and contain (an average of 283 days) involved data stored in multiple environments, including public cloud, private cloud, and on-premises.
These types of breaches accounted for 40% of breaches investigated, with an average remediation cost of over $5 million.
Notably, a 27% increase in intellectual property theft drove up costs, which rose nearly 11% year-over-year to a record $173.
The researchers also said that adding genAI to networks is pushing data closer to the surface, citing stolen or compromised credentials as the most common attack vector (16%).
Silo-breaking data sharing initiatives aim to streamline operations and meet information sharing requirements across industries, including healthcare.
According to the researchers, with more activity occurring across different environments, organizations need to reassess their security and access controls.
Passing on higher costs to consumers
Organizations said they plan to invest more in incident response planning and testing, threat detection and response technologies, and better identity and access management. However, 63% of organizations said the cost of consumer goods or services will increase this year because of the breach.
“Companies are locked in a perpetual cycle of breaching, containment and responding to the consequences,” Skapinetz said in a statement.
“This cycle now often includes investing in hardening security and passing on the costs of breaches to consumers, making security the new cost of doing business.”
Healthcare costs are expected to rise by 8% in the coming yearand more than one in four adults said they skipped or delayed needed health care in the past 12 months because of cost, according to a recent KFF survey briefing on healthcare cost challenges in the US
Rising costs, for whatever reason, can ultimately impact access to health care.
Andrea Fox is Editor-in-Chief of Healthcare IT News.
Email address: afox@himss.org
Healthcare IT News is a publication of HIMSS Media.
The HIMSS Healthcare Cybersecurity Forum is scheduled for October 31-November 1 in Washington, DC More information and registration.