According to IBM, the average cost of a data breach was $4.24 million1. When companies compare that insurmountable cost to spending 10-20% of their annual budget on cybersecurity, it’s a hard pill to swallow when you hear companies save that money and face cyber risk.
Today, cybersecurity is a major investment, and companies need to be proactive in defending their network and assets. Unfortunately, all businesses are at risk of being a target – especially small and medium business (SMBs). So, when you compare the cost of a cyber attack to the cost of having a proper solution, you will learn that it’s more valuable to have a security system in place.
As many businesses decide how much to spend on cybersecurity, they ask, “is the cost of cybersecurity worth it”? Short answer: it is. Long answer: it is, keep reading to learn why.
There is no “one size fits all” solution to cybersecurity which means cyber security cannot be defined by a single price. Cybersecurity is a multi-layered approach for many organizations, and these approaches are custom-tailored to a company’s budget.
Unfortunately, cybersecurity is too broad to put a price tag on. Within the category are services including assessments and testing and products like software, and physical devices that provide endpoint security and multi-factor authentication.
While larger corporations tend to be a main target for hackers, this does not mean SMBs are off the hook3. Larger corporations require a higher budget due to their employees, network security, and because they host multiple devices, and accounts.
These considerations – amongst many others – factor into a company’s decision for cybersecurity. For example, if a large company decides to switch MFA providers, they face a lot of setbacks from employees needing to reset their authentication methods. Meanwhile, small companies may lack the budget to implement a strong security solution for MFA in the first place.
Apart from your organization’s size, you may need to invest more in cybersecurity depending on your company’s industry. The healthcare and financial services industries are under constant supervision and must adhere to strict compliances like HIPAA and PCI-DSS, for example, as those industries host the personal identifiable information like addresses, names, and social security numbers of countless individuals.
To meet stricter compliances, organizations need to implement multi-factor authentication, which may increase costs depending on the vendor and the authentication methods you choose. Passwords, for example, are an affordable option but not secure enough for today’s fast-paced digital environment. Additionally, if you use authentication methods from different vendors, you must also pay to aggregate their different solutions under your own system.
The general budget for cybersecurity investment is roughly 0.2% to 0.9%2 of a company’s total yearly budget. Based on the IT budget (which is 10% to 20%2 of the company’s yearly budget), this amount may be too little for many organizations to invest in cybersecurity. However, there are a number of factors that impact the budget:
Many organizations are looking to add cyber insurance to their security arsenal, so if you are looking to invest in cyber insurance, you may need to pay high premiums if you do not have a proper cybersecurity solution in place.
However, if you have an MFA solution implemented, you can get a lower premium on cyber insurance. It is much more affordable to deploy an MFA solution and receive a lower premium cost on cyber insurance compared to paying the extremely costly premium of cyber insurance without a proper solution in place.
According to IBM1, the average cost of a data breach was $4.24 million in 2021, which is a 10% increase from 2020. The cost of a data breach comes from four main sources:
When comparing $4.24 million in costs, which do not include brand and reputational damages to less than 1% of your company’s annual budget, it should be obvious to which cost is more “worth it”.
The lack of a secure Identity-Access Management solution like MFA can play a role in a drastic cost increase for companies facing cyberattacks. Because of the shift to more remote working, there is simply a greater landscape for cyberattacks, which leads to a larger cost increase.
In data breaches where the victim had remote work, the cost increased by $1.07 million1 – meaning those breaches were caused due to the lack of remote work security and costs became higher.
Today, organizations need to implement digital transformation changes like cloud migration and implement a secure IAM solution. Because of remote work, threat actors can easily pose as employees, so companies need a way to verify a user with 100% certainty – and this might require a higher budget.
When you factor in these costs, the price to protect all your data becomes much easier to stomach.
One of the first things to do is to implement an IAM solution, especially if you are working in a hybrid work environment. As mentioned before, no matter your budget, you can afford a secure IAM solution while still avoiding the least secure authentication methods (like passwords). Identity-Bound Biometrics is surprisingly more affordable than you may think. - especially because IBB does not require any additional hardware.
If your budget is tighter, there are free options that do decrease your risk of being a victim of a cyberattack
For one, enable automatic updates to your devices and software for all your employees. Many cyberattacks today revolve around zero-day vulnerabilities, so having automatic updates can quickly patch these problems without having to do it manually.
If you already have PortalGuard, MobileAuth comes at no cost, uses Identity-Bound Biometrics, and more importantly, it is passwordless.
Secondly, optimize your existing access management controls. Many organizations tend to give all their employees admin-level access, but the average employee does not need to be an administrator and have access to confidential data. Your marketing team does not need access to accounting data and vice versa. Insider threats continue to be a way cyberattacks start, and if everyone has admin-level access, cybercriminals can access crucial data from a low-level employee. By setting up proper access management controls, organizations can prevent this from happening.
As long as cyberattacks exist, businesses need to be proactive and invest in cybersecurity. When comparing the cost of a cyberattack and the cost of cybersecurity, it is much more affordable to protect your business instead of always having to play around cyber risk.
While many businesses may not have a high budget to afford a CISOs or have more dedicated efforts to cybersecurity, making the push is better than not making a movie. After all, it’s better to increase cybersecurity spending as a safety precaution than having to pay off the large costs due to a cyberattack.
However, regardless of your budget, there will always be a solution meant for you. The right solution is one that fits your budget, but more importantly fits your users’ needs and does not mitigate your existing workflow.
Are you unsure of which authentication method is best for your users? Download our eBook, Ranking Authentication Methods (and Choosing the Right One), which is a detailed analysis of very common cybersecurity methods that you might be using today to secure your assets.
In the eBook, we rank the methods based on several factors including cost, security, convenience, and more. Read our eBook and see which one is the best one for you.
Sources:
1https://www.ibm.com/downloads/cas/OJDVQGRY
2https://www.scarlettcybersecurity.com/how-much-does-cybersecurity-cost