One security breach can destroy an enterprise

McAfee has released a report revealing a widespread belief that a major security breach, even an unintentional one, could lead to the collapse of a major corporation.

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By  Duncan MacRae Published  April 26, 2007

McAfee has released a report revealing a widespread belief that a major security breach, even an unintentional one, could lead to the collapse of a major corporation. The global research, Datagate: the Next Inevitable Corporate Disaster, conducted by Datamonitor, surveyed more than 1,400 IT professionals at companies with at least 250 employees all over the world. Of all the respondents, 33% said they believe a major data loss incident involving accidental or malicious distribution of confidential data could put them out of business. The research also suggests that while awareness regarding the danger of breaches is high, the problem continues to grow, with 60% of respondents saying they had experienced a data breach in the past year. Only 6% of respondents could say with certainty that they had not experienced one in the previous two years. Despite the prevalence of breaches, however, enterprises are still devoting just a fraction of their IT budgets to the problem. On average respondents spend just one-half of one percent of their overall IT budgets on data security. “Six in ten companies admitting a breach in just the past year is ample proof that more needs to be done to address this very serious problem,” said Patrick Hayati, regional director at McAfee Middle East. “Awareness alone isn’t enough. To protect customers, employees and shareholders, data loss prevention needs to become a top priority at every level of the organisation, from the board room to the lunch room.” The report has also revealed some other key findings. A data breach that exposed personal information would cost companies an average of US$268,000 to inform their customers—even if the lost data is never used. Data leakage is the doing of insiders, according to 61% of respondents, and 23% believe those leaks are malicious. Nearly half of the respondents don’t debrief or monitor employees after they have given notice that they are leaving the company, while 23% of respondents were able to estimate the total annual cost of data leakage – the average being $1.82 million.

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