The True Cost of Cybercrime in Brazil
Many cybersecurity eyes had been on Brazil in the run up to this summer’s events. Every system has been under scrutiny, from ticket fraud prevention to the clocks used to time athletes. But cybercrime in this region isn’t a new concern; attackers had set their sights on the country long before summer sports fever hit.
Last year, IBM X-Force Executive Security Advisor Limor Kessem detailed the over $8 billion a year Brazil loses to cybercrime. This year’s “2016 Cost of Data Breach Study: Brazil” report from the Ponemon Institute placed Brazil at the top of its list of places most likely to suffer a material data breach involving 10,000 records or more.
The cost of data breach report assessed post-breach costs incurred by 33 Brazilian companies in 12 different industry sectors. The research revealed that the average per capita cost of a data breach (per capita cost and cost per compromised record have equivalent meaning in this report) increased significantly, from R$175 (Brazilian Real) to R$225.
The total organizational cost of data breach increased from R$3.96 million to R$4.31 million, according to the report.
Some sectors saw a steeper rise in costs than others. Specifically, services, energy and financial services had a per capita data breach cost substantially above the overall mean of R$225, with services topping out at R$398. Meanwhile, public sector, transportation and consumer companies had a per capita cost well below the overall mean value.
Taking a look at the global costs year over year, Brazil has a comparatively low total per capita cost of data breach, but there was a significant increase from 2015 to 2016.
In general, the more records lost, the higher the overall cost of the data breach. Brazilian companies that suffered breaches of less than 10,000 records incurred an average cost of R$1.88 million. In larger breaches of 50,000 records or more, the cost skyrocketed to R$6.95 million.
One additional data point to note: The total cost of a breach goes up if customer churn is a factor. This includes losing a customer due to bad publicity and loss of customer confidence post-breach. When customer churn goes over 4 percent, the added cost of breach management can reach R$5.42 million. That number goes down to R$3.81 million when churn is under 1 percent.
Churn rates vary by industry. Services, financial and energy had relatively high churn rates, while the public sector had a low churn rate.
