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Sad Reality: It's Cheaper To Get Hacked Than Build Strong IT Defenses (theregister.co.uk)
It's no secret that more companies are getting hacked now than ever. The government is getting hacked, major corporate companies are getting hacked, and even news outlets are getting hacked. This raises the obvious question: why aren't people investing more in bolstering their security? The answer is, as a report on The Register points out, money. Despite losing a significant sum of money on a data breach, it is still in a company's best interest to not spend on upgrading their security infrastructure. From the report: A study by the RAND Corporation, published in the Journal of Cybersecurity, looked at the frequency and cost of IT security failures in US businesses and found that the cost of a break-in is much lower than thought -- typically around $200,000 per case. With top-shelf security systems costing a lot more than that, not beefing up security looks in some ways like a smart business decision. "I've spent my life in security and everyone expects firms to invest more and more," the report's author Sasha Romanosky told The Reg. "But maybe firms are making rational investments and we shouldn't begrudge firms for taking these actions. We all do the same thing, we minimize our costs." Romanosky analyzed 12,000 incident reports and found that typically they only account for 0.4 per cent of a company's annual revenues. That compares to billing fraud, which averages at 5 per cent, or retail shrinkage (ie, shoplifting and insider theft), which accounts for 1.3 per cent of revenues. As for reputational damage, Romanosky found that it was almost impossible to quantify. He spoke to many executives and none of them could give a reliable metric for how to measure the PR cost of a public failure of IT security systems.
It is also cheaper (and usually more pleasant) to live in houses with breakable glass windows and pickable locks, and just prosecute the burglars who flaunt the niceties and come in anyway.
If it's truly the case that it's cheaper to let data breaches happen than to protect against them, then some sort of incentive (or, punishment) needs to be put into place to change that situation. This is one of the few areas where government intervention is actually warranted: When something is not in the best interest of corporations but is very much in the best interest of citizens.
It's probably cheaper to let factory workers die on the job than it is to put all the safety measures in place to ensure they don't. Yet corporations put those safety measures in place anyway. They don't do it out of fondness of the workers, they do it because the government will shut them down if they don't.