7 Lessons from Increases in Data Breach, Cybercrime Headlines

Cybercrime continues to grow worldwide
Cybercrime continues to grow worldwide

Cybercrime and data breaches continued to make headlines in 2016, with a reported breach increase of 25% in the U.S. alone. Cybercrime stories crept up slightly to just under 5% of stories tracked by ICM in 2016. The Identity Theft Resource Center tracked 980 reported U.S. breaches comprising more than 35 million records, an increase of 25% over the ITRC’s 2015 results.

Healthcare accounted for 36% of breaches and an alarming 44% of records, while Government comprised 6.7% of breaches for 37% of records hacked. In their annual study, Ponemon Institute and IBM reported the average cost of a data breach at $4 million, a 29% average cost increase since 2013. The study noted an average per-record-breached cost of $158 USD.

Among the notable breaches reported were industry stalwarts like retailer Eddie Bauer, Verizon Enterprise Solutions, Capital One and Charles Schwab, Habitat for Humanity and the Florida Bar Association, Omni Hotels and Wyndham Vacation Resorts, Chicago Public Schools, Dropbox, Tumblr and Google, even Krispy Kreme Donuts.

More alarming were well-planned attacks that knocked out electric utilities in Ukraine and the summertime hack of the U.S. Democratic National Committee’s network. Officials in several countries have raised concerns about the security of critical infrastructure such as power and water utilities. Three years ago, at least four American electric utility companies were hacked, threatening to destabilize large areas of the power grid. A variety of malware programs were used, including BlackEnergy, KillDisk and others. Ransomware attacks ramped up in 2016, as well, with disturbing attacks on large healthcare systems, including against Washington, D.C.-area hospital chain MedStar Health.

Management denial is the biggest impediment to effective crisis management. About half of all organizations worldwide have no crisis plan in place, increasing both their risk and the probability of severe financial impact when the inevitable happens. Organizations that plan and prepare for crisis are better positioned to prevent, mitigate and minimize financial impact and reputational damage in case of crisis.

Among the most important crisis lessons of 2016:

  • Failing to plan is a recipe for disaster!
  • Understand your organization’s vulnerabilities and develop strategies to address them.
  • Know who your key stakeholders are and whether they are advocates or adversaries.
  • With social media, listen first, then engage stakeholders in conversations well before crisis strikes to build a goodwill bank.
  •  Expect a crisis to break first on social media.
  •  If you haven’t already, invest in a crisis communication plan for the organization.
  •  If you have a crisis communication plan, update and exercise it this year!

Is Your Business at Risk for a Crisis?

To learn more about the industries in the news in 2016 and the kinds of crises that are most likely to affect your organization, download ICM’s free annual crisis report. Ready to create your crisis plan?  Contact us now.