IBM Security has recently come out with a report, titled ‘Cost of a Data Breach’, outlining the financial implications of a data breach. The survey conducted for the report finds that 70% of businesses that adopted WFH because of the pandemic, expect the costs of breaches to increase as the world shifts to remote working systems. Examining some 500 odd actual data breaches, the report says the breaches cost enterprises around $2 million per breach on an average globally.
And protecting data is not just firewalls and passwords. It involves fool-proof measures like cloud backups, encryption, multi-factor authentication methods, detection and response systems, etc. It is wise to estimate what a data breach would cost you relative to the security measures one adopts.
PROTECTION COSTS RISING
Rahul Bhargava of InCred insists that data protection costs do rise, as advanced technologies are required to keep out fraudulent elements. It could be through firewalls, fraud detection, or authentication systems, which usually come at a price, as safeguarding data is not an easy pursuit.
“In addition, enterprises that face data theft have to pay a heavy price, as the loss of data could lead to serious reputational damage. If a bank were to lose its customers’ data due to unchecked data management practices, there will be irreparable consequences. It is therefore prudent to stick to the security industry’s old adage – ‘your security cost should be proportional to the value of your asset’. If your data is personal and valuable, the cost of setting up multiple layers of security is justified,” he argues.
Shreeraj Deshpande of Future Generali India Insurance says there are many sources of data and since data is stored and transported frequently, there are risks of theft, leakage, and tempering, which are all increasing. And to contain these vulnerabilities, more resources are required.
“Having highly secured hosted systems and exchanges, encryption mechanisms, network protection, restrictive control access to users and such other means and ways in place is a highly expensive affair,” he says.
Rahul Chopra of Clix Capital says since data is one of the key assets businesses have today and which gives them a competitive advantage and adds up to the top and bottom line, it is highly necessary that businesses invest in ensuring the security of this data too. He also says awareness about the crucial nature of data as well as compliances one needs to meet to secure the data have pushed businesses to increase their budgets towards information and cybersecurity. Technologies such as DLP, or Data Leak Protection, DRM, or Digital Rights Management, etc, are quite common and have gained a lot of traction recently and these technologies cost too, he says.
Rachit Chawla of Finway Capital too argues that there is definitely an uptrend in terms of the cost of securing data from theft, tampering, and other risks. “Very few companies are working towards this. Also, these few companies that are working in this direction, charge a premium cost as the market right now is dependent only on such few companies,” he adds.
Nilesh Sangoi of Fincare Small Finance Bank, however, believes that given that securing data consists of investments in technology as well as skilled human resources, the costs are overall flat.
Prashant Deshpande of Shriram Transport says his company, being an ISO 27001 company, has enabled stringent measures for securing data. “We have strong processes and procedures that are enforced, reviewed, and updated regularly. We classify our data based on parameters like the importance of particular datapoints, access frequency, and confidentiality. Based on that, we deploy security protocols and we’ve seen our budgets increasing year-on-year as this is a crucial part of business management now. We have enabled role-based access through Privilege Access Management Solution and we also have a Security Operations Center team that does 24×7 data monitoring, encryption of crucial data and implements DLP among other measures to prevent theft or tampering of data,” he says.
What other costs are involved relating to data and do these costs show any upward trend?
Rahul Bhargava says one significant concern is about hiring niche talent, specialized resources, and onboarding technologies that can make sense of the large swathes of data being collected. Once organizations have the basics set up, they can build machine learning, AI models on top of it, and add several other emerging technologies to the mix to churn out data-centric solutions.
“However, these systems usually work on the garbage in, garbage out a concept, so controlling quantity/quality of data going in is paramount to facilitate the right and insightful method of data use. For this human resources and companies that specialize in this craft are required, whose services are really expensive. There are numerous examples where banks or corporate entities were overwhelmed by excess data, who didn’t know how to decipher the data. It requires specialists such as data scientists, engineers, etc. But there is a dearth of such talent and expertise, and they don’t come cheap,” he explains.
DATA CLEANSING COSTS
Prasant Deshpande points out to costs pertaining to data cleansing and periodic maintenance and this is important to remove unwanted or duplicate data based on the current requirements. This happens mostly in times of ad hoc and merger needs, he adds.
Converting data into something useful and actionable still requires a great deal of effort and one has to build models which suits their needs and business requirements, says Rahul Chopra of Clix Capital. Another challenge with large data sets, according to him, is how to convert them into meaningful information. Business intelligence solutions are the common remedy that facilitates reporting, analytics, and visualization of large data sets but this is a costly affair, he says.
For Rachit Chawla there are costs involved in filtering the data. “There is data which you are receiving from different ends – whether it is pull advertising, push advertising, cold calling, or buying. The major cost – at least fintech companies – is in terms of filtering it out. Thanks to Jio, so much data is now available about the 1.3 billion population as most of the population is there on the internet and their data is something everybody is focussing on. But, filtering to target the right customer and the right segment is important. That is the cost we have to incur and it is definitely on an uptrend,” he says.