We all hear it over and over again: complying with data protection requirements is expensive. But did you know that the financial consequences of non-compliance can be far more expensive?
The Ponemon Institute once again looked at the costs that organizations have incurred, or are incurring, in meeting mandated requirements, such as the EU General Data Protection Regulation (GDPR), the Payment Card Industry Data Security Standard (PCI-DSS), and the Healthcare Information Portability and Accountability Act (HIPAA). The results were compared with the findings from a 2011 Ponemon survey on the same topic. The differences were stark and telling.
Average costs of compliance have increased 43%, up from around $3.5 million in 2011 to just under $5.5 million this year, while non-compliance costs surged from $9.4 million to $14.8 million during the same period. On average, organizations that are found non-compliant with data protection obligations these days can expect to fork out at least 2.71 times more money getting started and proving compliance than if they had been compliant in the first place.
For most enterprises, the cost associated with buying and deploying data security and incident response technologies account for a bulk of their compliance-related expenditure. On average, organizations in the Ponemon survey spent $2 million on security technologies to meet compliance objectives. The study found that businesses today are spending on average about 36% more on data security technologies and 64% more on incident response tools compared to 2011.
Financial companies tend to spend a lot more - $30.9 million annually - on compliance initiatives than entities in other sectors. Organizations in the industrial sector and energy/utilities sector also have relatively high compliance-related expenses of $29.4 million and $24.8 million respectively, on an annual basis.
So, what is the hardest regulation to satisfy? GDPR. 90% of the participants in the Ponemon studied pointed to GDPR as being the most difficult regulation to meet.
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It's a paradox, but the less you might spend, the more you might pay.