Many Hacked Businesses Remain Unprepared For The Next Breach

A company suffers a data breach. So, of course, it then retrenches and shores up its defenses and processes to prepare for the next attack, right? Not so much, a new survey of organizations that have suffered breaches shows: More than one-third of organizations hit by data breaches still have no formal plan or process in place to handle the next breach.

The data, gathered from 470 senior privacy and compliance professionals mainly in retail, healthcare, and pharmaceutical firms that have experienced at least one data breach, also shows the real fallout of a breach and how most organizations are well-aware of the fallout: Seventy-six percent have had or expect to have a breach that results in loss of customers and business partners, and 66 percent have, or expect to, suffer "serious" financial consequences in the wake of a breach.

Three-fourths have had or expect to suffer a breach that hurts their public image.

Even so, many of them remain unprepared for the next attack, according to the new Ponemon Institute report, "Is Your Company Ready for a Big Data Breach?"

"Real companies involved [with data breaches] are still not having a data breach plan. It's amazing to me that we still have [companies] that have lost business" due to breaches, yet still not have a plan, says Michael Bruemmer, vice president with Experian Data Breach Resolution, which commissioned the Ponemon report.

"More than three-fourths of those expect to, or have had, material loss of customers or business or brand recognition. They get it and understand it, but [their approach] hasn't changed that much," Bruemmer says.

Nearly 40 percent that had been hit by a data breach still have no data breach preparedness plan. "They've been bitten once and go back again [without a plan] because they don't understand the importance of [having one]," he says.

Data breach insurance remains a rarity, with only 10 percent of the organizations with policies, and most don't have game plans for alerting victims whose data was exposed in the breach. Just more than 20 percent say they have teams trained to work with victims, and 65 percent have no system in place to verify that each victim was contacted.

Hacked organizations aren't fully equipped with forensics technology, either: Just one-fourth say they have the ability to correct the cause of the breach; 19 percent have advanced forensics in place to analyze the root cause of an attack; and 36 percent have tools to analyze the size and impact of a breach.

Encryption remains rare as well. Thirty-two percent encrypt sensitive information in computers and storage devices, 46 percent do not, and 22 percent were unsure.

"The study findings show that organizations need to prioritize preventing future breaches and better manage post-breach response," says Larry Ponemon, chairman and founder of the Ponemon Institute. "In addition to improving technical safeguards, it's clear that companies also should focus more attention on meeting the needs of affected consumers that suffer a data breach."

The full report is available here for download.

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