• IBM Security has released the findings of its latest Cost of a Data Breach Report.
• Looking at South Africa, the average data breach cost local organisations R49.45 million in 2023.
• This represents a 73 percent increase since the Report first began eight years ago.

Security is top of mind for many, if not all organisations, especially those operating in South Africa where cybercrime continues to rise at a concerning rate. This as the costs associated with a hack or data breach can prove crippling for local organisations.

Focusing precisely on how much a data breach costs South African organisations is IBM, which released the findings of its latest Cost of a Data Breach Report. Having started eight years ago, the report details that the average cost of a data breach in SA is R49.45 million, representing an 8 percent increase over the last three years.

While that sounds like an acceptable rate of increase, since IBM Security first started publishing these reports eight years ago, average data breach costs have risen 73 percent.

Further breaking down the aforementioned R49.45 million figure, IBM Security explains that much of the cost goes into investigations in order to identify specifically what happened to result in the breach.

“Detection and escalation costs reached R20.88 million-the highest portion of breach costs and indicating a shift towards more complex breach investigations. This was followed by costs associated with lost business at R13.56 million, post-breach responses at R13.29 million and notifying relevant stakeholders at R1.72 million,” IBM Security unpacked in a release sent to Hypertext.

“The financial sector experienced the highest average costs of data breaches, totalling R73.1 million. The industrial and services sectors were second and third, with R71.37 million and R58.78 million, respectively,” the release added.

As with many data breaches in recent years, the human element is the one to blame. This as stolen or compromised credentials and phishing scams constituted 14 percent each as the initial attack vectors, according to the report.

“Globally, the study also found that 95% of studied organizations, including South African organizations, have experienced more than one breach. However, breached organizations were more likely to pass incident costs onto consumers (57%) than to increase security investments (51%),” the report also identified.

As for why South Africa has become a prime target over the past decade, the reason is quite simple, given the country’s economic and political status on the African continent.

“South Africa is the financial center and economic gateway to the rest of the continent. This knowledge is not exclusive to the business community; cyber attackers are aware of it too as the financial sector is the most targeted,” explained Ria Pinto, GM and Technology leader at IBM South Africa (pictured above).

“Organizations should look to modernize their perimeter security strategies to enhance protection of their financial data by using zero-trust security solutions, underpinned by AI and automation, to increase their cyber resiliency, manage the risks and comply with strict data privacy policies such as the Protection of Personal Information Act (POPIA),” she advised.

While there is mention of POPIA, we are yet to see any tangible fines or action taken against companies that suffer data breaches by the Information Regulator. Once those start to happen, however, data breach costs will likely rise significantly, and may prompt organisations to take security even more seriously.

“Time is the new currency in cybersecurity, both for the defenders and the attackers. As the report shows, early detection and fast response can significantly reduce the impact of a breach,” noted Chris McCurdy, GM of Worldwide IBM Security Services.

“Security teams must focus on where adversaries are the most successful and concentrate their efforts on stopping them before they achieve their goals. Investments in threat detection and response approaches that accelerate defenders’ speed and efficiency – such as AI and automation – are crucial to shifting this balance,” he concluded.

To download the latest report for yourself, head here.

[Image – Photo by Fili Santillán on Unsplash]