back icon Back Insights 10/30/2023

Data Breach Response and Incident Management: Safeguarding Digital Assets

Data breaches are not just an omnipresent threat but a harsh reality for today’s organizations. As the country with the highest data breach density in the world, the United States reported nearly 2,000 cases of data compromise in 2022, a stark increase from the 447 cases reported a decade prior. Yet, while the threat remains persistent, preparedness can significantly reduce the impact. 

Per a 2022 IBM assessment, organizations with a fully deployed data breach response plan save $3.05 million on average breach costs and experience a 74-day shorter breach lifecycle than those without one. However, this still begs the question, what actions should be taken in response to a data breach? What are the essential elements of a data breach response plan?

In this comprehensive guide to data security, we’ll explore the categories and consequences of data breaches and the criticality of a data breach response plan. From the importance of preparedness and communication protocols to potential legal considerations, here’s a detailed look at safeguarding your organization’s most valuable assets against today’s cybercriminals.

What Are Data Breaches and How Common Are They?

A data breach is a security incident in which unauthorized individuals gain access to or alter sensitive or confidential data, such as personal data, including protected health information (PHI) and Social Security numbers; financial data, including bank account numbers and login credentials; and corporate data, including customer data records and intellectual property (IP). 

While accidental data breaches frequently occur from a variety of internal system errors and cloud misconfigurations, malicious cybersecurity incidents are primarily attributed to these four categories of data breaches:

  1. Malware Attacks: Malicious software, including ransomware and spyware, infiltrates the system, potentially stealing, altering, or blocking access to data. Compared to 2019 data, malware attacks increased by 358%, and ransomware attacks increased by 435% in 2022.
  2. Phishing Scams: Cybercriminals impersonate trustworthy entities, tricking individuals into providing sensitive data. Almost a quarter of all breaches are phishing scams, making them one of the most prevalent cybercrimes, as per the Federal Bureau of Investigation (FBI). 
  3. Insider Threats: Current or former employees or business partners misuse access rights to leak or exploit sensitive data. Recent statistics indicate that just over 10% of all data breaches were led by malicious insiders, resulting in average costs of $4.18 million.
  4. Physical Thefts: Devices like laptops or hard drives containing sensitive consumer or corporate data are physically stolen (or are accidentally lost) and fall into malicious hands. Lost devices account for 5% of data breaches at an average annual cost of $3.94 million.

Data breaches can lead to immediate financial losses, legal penalties, and long-term reputational damage—not to mention that the exposed data can be used for further criminal activities like fraud or identity theft. As of 2022, the average cost of a single data breach is approximately $4.35 million, with impacted organizations losing up to 56% of their market cap in just two years. 

What is a Data Breach Incident Response Plan?

A data breach response plan is an internal document that outlines what an organization should do in the event of a data breach or similar data security incident. Also referred to as a cyber incident response plan due to the digital nature of modern data breaches, a breach response plan works to minimize data loss, mitigate potential damages, and maintain communication with stakeholders.

A data breach response plan must encompass clearly defined roles and responsibilities, communication protocols, and system and data recovery strategies, ensuring a holistic response. While exact data breach response guidelines vary by industry, most plans also include legal considerations, including the reporting requirements and potential liabilities of a data breach. 

There are several benefits of having a data breach response plan to map the beginning of a breach lifecycle through detection and containment. Rapid response can curtail the amount of data exposed, while transparent communication can protect brand image. An incident response (IR) team and a regularly tested plan can help save up to $2.66 million on total data breach costs. 

Steps to Implement an Effective Data Breach Response Plan

When we look at organizations that have successfully navigated large-scale data breaches, they share one thing in common: prepared and practiced data breach response plans. As you draft a data breach response plan for your organization, remember not to store it on your main computer network. In the event of a malware attack, your response plan must remain accessible beyond internal systems.

Step 1: Preparation and Prevention 

The first step to an effective data breach response plan is to conduct a risk assessment, otherwise known as a cybersecurity audit, to identify potential weaknesses in your defenses. Create a policy to categorize what constitutes a breach—such as which data, applications, or systems may be impacted—along with potential security incidents, such as malware or phishing schemes. 

Designate an incident response (IR) team, which may include representatives from IT, human resources (HR), and leadership. Decide what will activate your team and gear them with advanced threat detection tools and continuous training to recognize and report potential threats. Likewise, create a contact list, including legal counsel and cybersecurity specialists.

Step 2: Detection and Assessment

The next step in an effective data breach response plan is to utilize intrusion detection systems (IDS) and security information and event management (SIEM) tools to detect breaches and gauge their scope and impact promptly. It’s fiscally (and ethically) irresponsible to assume every incident is a data breach, so SIEM tools help confirm that an actual malicious security incident occurred.

Once a breach is validated, you must identify the type of data disclosed and estimate if the attack was accidental or malicious. Next, assign an incident manager from your IR team responsible for the containment and mitigation. Depending on the size of the breach, you might elect a Chief Information Security Officer or select a third-party cybersecurity specialist for the role. 

Step 3: Containment and Mitigation 

Step three of a data breach response plan is containment and mitigation, the phase in the breach lifecycle in which the affected systems are identified and brought back under corporate control. First, determine the status of the breach, such as ongoing (hackers are attempting to breach), active (hackers have infiltrated internal systems), or post-breach (hackers have obtained data). 

Next, embark on short-term measures, like disconnecting affected systems from the network and blocking unauthorized access to preserve evidence for the investigation. Monitor all system entry and exit points and update user access credentials. When applicable, remove all improperly (or illegally) posted information from the web, including sensitive data cached on your website. 

Step 4: Notification and Communication 

By step four of your data breach response plan, it’s time to move forward with communication protocols. Depending on the types of sensitive data exposed, you may need to alert the affected individuals, such as customers or business partners. Moreover, global policies like the General Data Protection Regulation (GDPR) mandate that affected parties be notified within 72 hours. 

Review notification laws to determine if you should involve law enforcement. If sensitive consumer data is stolen, you must notify the Federal Trade Commission (FTC) and the Department of Health and Human Services (HHS) in the case of PHI. From here, anticipate common questions and craft clear messages to inform stakeholders and offer reassurances.

Step 5: Investigation and Remediation

Now is the point in your data breach response plan to determine the source and scope of the incident. Consider hiring forensic experts to ascertain the breach’s origin, as they can help capture and analyze evidence. Be sure to review logs to determine who accessed the impacted systems during the breach and assess if measures like encryption were enabled when it occurred.

Seek advice from your legal counsel on properly documenting and preserving all digital evidence to ensure it can be used in law enforcement investigations or a court of law. Once you receive the forensic reports, taking the recommended remedial measures as soon as possible is vital. Patch any vulnerabilities and ensure all systems are fortified against similar future attacks. 

Step 6: Evaluation and Improvement 

The last step in a data breach response plan is a post-incident analysis. What went right? Where did the response falter? Use these insights to refine your response plan, improving your readiness for potential future breaches. Regularly test your updated response plan using different scenarios—like a ransomware attack versus a phishing scam—to enhance response effectiveness. 

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