SINGAPORE 7th August 2023 — Data breaches cost billions of dollars around the world each year; for instance, IBM found back in 2022, that the average cost of a data breach in the U.S. to be $9.44 million. Besides monetary losses, data breaches erode consumer confidence, and lowers an organization’s credibility and reputation.

In the latest report from ExtraHop, a leader in cloud-native network detection and response (NDR), findings showed that public companies surveyed saw net income drop an average of 73 percent roughly one year following the announcements of a data breach.

Beyond Upfront Costs, Reputation Damages and Revenue Losses

To help business leaders better understand the full impact of a data breach, the analysis from ExtraHop looks at the costs associated with data breaches at six organizations, calculating the sum of regulatory fines, legal settlements, and cyber insurance, in addition to the longer-term effects on corporate earnings and stock price.

Nearly all organizations analyzed experienced a decline in quarterly earnings and stock prices after a data breach occurred. In one example following their study, ExtraHop noted that the company’s stock prices dropped double-digits after the breach in months to follow, as well as a large sum of insurance payments in filings to compensate for its security failings.

“When a data breach hits, real people lose real money – it goes way past the upfront costs that accompany stolen records and the number of people affected,” said Patrick Dennis, CEO, ExtraHop. “Both investors and customers lose faith in the business, which has a ripple effect on the organization for years to come. It’s important that corporate leaders take a hard look at their budget and make the cybersecurity investments they need to more effectively manage risk.”

Using Network Intelligence for Better Prevention

In today’s security landscape, organizations need full visibility into their network to track the movement of potential intruders and identify security threats before they become business problems. Using network intelligence to detect attacks in their earliest stages–when attackers are scanning for open ports and vulnerabilities, when they start using Active Directory to enumerate domain admin accounts, when they try elevating their privileges, or begin using Remote Desktop Protocol–is critical to preventing costly, damaging data breaches and avoiding unexpected security expenses.

While securing an organization can be a significant investment, ExtraHop argues that strong security tools can be much more cost effective.

Learn more about the True Cost of A Security Breach with ExtraHop, that shares specific tactics and techniques to help organizations better prepare for potential data breaches.

(This article was adapted from a press release from ExtraHop).

About ExtraHop

ExtraHop is the cybersecurity partner enterprises trust to reveal the unknown and unmask the attack. The company’s Reveal(x) 360™ platform is the only network detection and response platform that delivers the 360-degree visibility needed to uncover the cybertruth. When organizations have full network transparency with ExtraHop, they see more, know more, and stop more cyberattacks. Learn more at www.extrahop.com.