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2014: The Year of the Security Breach
2014 was a banner year for security breaches. According to the Identity and Theft Research Center, there were 783 reported US data breaches this past year, a 27.5% increase from 2013. Hacking was the number one cause of a breach, accounting for 29% of incidents. On average, it took a company 205 days to detect a breach even existed. Sony, Target, Home Depot, JP Morgan Chase and Anthem were amongst the many high profile victims of 2014. These breaches had profound (and lasting) financial and reputational effects. eBay, for example, was greatly impacted by its 2014 breach in which consumer passwords, names, birth dates, addresses and emails were revealed. Not only did eBay pay damages for this breach, but the company’s balance sheet was also impacted, as consumers were hesitant to make marketplace purchases after the breach occurred. By July 2014, 85% of eBay consumers had reset their passwords, but account activity levels hadn’t returned.
Security is C-Level Issue
Security breaches are no longer “ just ITs problem”; they’ve become a top concern for c-level executives. In a recent CIO survey conducted by Piper Jaffrey, security was listed as the number one area of increased investment in 2015. 75% of CIO’s indicated they plan to increase security spending this year, compared to 59% in 2014.
Yahoo Security Chief, Alex Stamos, suggests how both enterprise CIO’s and CMOS’s might think about security investments. He encourages CIO’s to focus on “attack surface minimization”, or finding the least expensive and easiest way to reduce their risk. Enterprises can begin by imagining what their business looks like from the outside to an attacker and addressing those vulnerabilities. Stamos also recommends that, for all functions where a business isn’t running its own software, they should move to the cloud. CMO’s, who are chiefly concerned with brand image and reputation, should invest in proactively talking about security (before there is any reason to).