Research Suggests Data Loss Could Lead To Corporate Collapse

May 1, 2007 4:25 PM

           

McAfee Inc., Santa Clara, Calif., has released a report titled "Datagate: The Next Inevitable Corporate Disaster?" revealing a widespread belief that a major security breach, even an unintentional one, could lead to the collapse of a major corporation.

The global research, conducted for McAfee by Datamonitor, New York City, surveyed more than 1,400 IT professionals at companies with at least 250 employees in the United States, the United Kingdom, France, Germany and Australia.

Thirty-three percent of respondents said they believe a major data loss incident involving accidental or malicious distribution of confidential data could put them out of business.

The research also suggests that while awareness regarding the danger of breaches is high, the problem continues to grow. Sixty percent of respondents said they had experienced a data breach in the past year, and only 6 percent of respondents could say with certainty that they had not experienced one in the previous two years.

However, despite the prevalence of breaches, enterprises are still devoting just a fraction of their IT budgets to the problem, according to report.

On average respondents spend just one-half of 1 percent of their overall IT budgets on data security.

Additional findings from the research include:

- A data breach that exposed personal information would cost companies an average of $268,000 to inform their customers -- even if the lost data is never used;

- Sixty-one percent of respondents think that data leakage is the doing of insiders, and 23 percent believe those leaks are malicious;

- Nearly half (46 percent) of respondents don't debrief or monitor employees after they have given notice that they are leaving the company;

- Twenty-three percent of respondents were able to estimate the total annual cost of data leakage, and the average figure they gave was $1.82 million

- Respondents rated loss of intellectual; property and financial information as the two most valuable classes of data -- with the average estimated cost of leaked financial data reaching $1.68 million.

"Six in ten companies admitting a breach in just the past year is ample proof that more needs to be done to address this very serious problem," says Dave DeWalt, president and chief executive officer at McAfee Inc.

"Awareness alone isn't enough. To protect customers, employees and shareholders, data loss prevention needs to become a top priority at every level of the organization, from the board room to the lunch room."

Another recent poll conducted by King Research, Novato, Calif., showed that only 35 percent of managers say they are equipped to deal with a data loss, while a majority take their worries home with them.

The majority of IT professionals are concerned that they will lose their jobs if a security breach hits their company, according to the study.

The survey also showed that most IT managers in midsize companies say they are ill prepared when it comes to systems and security management and they are not confident in their safeguards.

"IT departments around the globe are working endlessly to combat and minimize security issues," says Diane Hagglund of King Research. "But even with the wide range of tools these organizations have invested in, there are still security gaps. Few IT professionals, those from the mid-market sector in particular, feel equipped to deal with lost corporate or personal data, and most don't include end-node vulnerability scanning as part of their ongoing security strategies."

IT managers also say they are inconsistent when it comes to managing their security systems.

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© 2008 Penton Media Inc.

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