What is the cost of an insider data breach?

As companies emerge from the pandemic, and 40% of employees are planning to switch jobs, corporate data is at risk. Files are being uploaded, shared, synced and emailed by employees as a normal course of everyday business or as they prepare for their next role with different organizations. The very same technologies that enable the free flow of data in an organization are also the ones that make it easy for insiders to exfiltrate data.

According to a recent study conducted by Aberdeen, an insider data breach can cost as much as 20% of annual revenue. Perhaps just as important, the study showcased that at least one in three reported data breaches involve an insider. Both accidental and malicious insider risk can cost businesses material portions of revenue on an ongoing annual basis.

Allowing the freedom of data movement and keeping trade secrets, including source code, and confidential customer lists, business plans, pricing and the like – secure from malicious and unintentional insider risks will be a continuing challenge if security organizations don’t recast their data security strategies and approach to data stewardship.

The impact of an insider data breach

• 33% of reported data breaches involve an insider. 78% of those insider data breaches involve unintentional data loss or exposure, demonstrating that malicious data theft and exposure is not the most significant insider risk facing security teams.
• 75% of organizations don’t have consistent, centralized visibility into file movements happening across their environments, highlighting that a majority of organizations lack the tools they need to surface detail and context about their file exposure.
• In 2020, a data breach was 4.5 times more likely to happen on end-user endpoints than back-end servers, emphasizing the importance of endpoint security for borderless workforces.
• Every day, trusted insiders cause an average of 13 data exposure events by moving corporate files to untrusted locations via email, messaging, cloud or removable media. The report also reveals the potential – and very real and material – impact of data exposure events on a business, which can cost as much as 20% of annual revenue.

“Data stewardship has become a boardroom imperative. And while insider risk is not a new problem in security, managing it effectively in today’s open and collaborative business climate – with enough resources – is,” said Joe Payne, Code42’s president and CEO.

“We know that one out of three data breaches involve an insider, though it’s likely much higher. Important ideas and key IP encompasses much more than just the company crown jewels – it’s the very digital and portable information like source code, customer lists and salary structures – data that when taken can leave a devastating impact on a company’s competitive position and bottom line.”

Understanding the risk can help better address it

Understanding the impact of insider risk within an organization will both help security teams address it, and allow them to successfully communicate the critical nature of the problem to the leadership team and the board. In the report, quantifying the risk to the organization came down to three “valuable” rules of thumb:

• Organization value: the higher the company’s valuation, the greater the likelihood of an insider data breach.
• Data value: there’s a one-in-four chance the corporate data breached was intellectual property (IP).
• IP value: in cases involving an IP breach, the total impact is up to 440% of the revenue generated by the IP.

As companies continue to adapt their security postures for modern working environments, managing insider risk and unintentional data exposure and leaks will increasingly become a focal point of successful data security strategies.