In Part 1 of this three part blog series, we focused on a cautionary tale about the costs of inaction. This post looks at the catastrophic financial events that security teams work to avoid. A data breach is not just a “firewall failure”; it is a direct and devastating hit to the company’s bottom line that is a drag on growth and performance. It may even be an existential threat to an organization.
According to IBM’s 2025 Cost of a Data Breach Report, the global average cost of a breach is more than $4.4 million USD, but the U.S. average now exceeds $10.2 million USD. These figures are not abstract numbers. They are a precise calculation of the immediate and long-term financial damage of a security event.
Deconstructing the Cost of a Breach
The costs of data breaches are far-reaching and often fall into two categories:
- Direct, Tangible Costs: These are often immediate and are easily quantifiable expenses:
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- Regulatory Fines and Legal Fees: Fines from government regulators like the U.S. Securities and Exchange Commission (SEC), the U.S. Federal Trade Commission (FTC) and increasingly state governments or groups of states in addition to the SEC and/or FTC. In the European Union, the EU’s Data Protection Authority and individual member states may impose penalties for failing to comply with the General Data Protection Regulation (GDPR). Fines, penalties, and lawsuit settlements often run in the tens of millions of dollars/Euros.
- Forensic Investigation and Remediation: The cost of hiring external experts to investigate the breach and the cost of the internal resources to clean up the mess.
- Lost Revenue: Data breaches result in increased customer churn. For example, 58% of consumers perceive breached brands as untrustworthy and 70% stop shopping with a company following a security incident. IBM reports that 38% of customers would change financial institutions after a breach.
- Lost Valuation: Public companies that suffer security or data breaches see dramatic drops in share prices and market valuation, 2% – 5% on average over the long term, but as high as 30% in the short term.
- Customer Restitution: The expense of often mandatory credit monitoring, customer notifications, and class-action lawsuits.
- Operational Disruption: The cost of unplanned downtime is a direct hit to revenue and productivity. For every hour a critical service is offline, businesses are losing money.
- Intangible and Ongoing Costs: These are the losses that can continue to impact a business long after the technical issues are resolved:
- Brand and Reputational Damage: The immediate erosion of customer trust is almost impossible to quantify, but its impact is felt in lost revenue and decreased market share for years. The cost of recruiting new customers and recovering lost customers increases and often requires additional sales and marketing consultants and investments.
- Litigation Expenses: Multi-state investigations and class action lawsuits in the U.S. take years to reach a conclusion, even if the ultimate outcome is a settlement. Major breaches that occurred in 2017 are just reaching final resolution in 2025.
- Increased Employee Turnover: Customer churn is not the only recruiting challenge after a data breach or security incident. Many companies see high potential team members leave distressed companies and face challenges recruiting new talent.
The ROI of Runtime Protection
From a CFO’s perspective, this is where runtime protection and remediation shows its true value. It’s not a speculative expense; it’s an intelligent financial decision with a clear return on investment. It’s the ounce of prevention that is worth more than a pound of cure. By implementing runtime protection, organizations:
- Minimize Breach Probability: Runtime Protection directly reduces the likelihood that a vulnerability can be successfully exploited, averting the multi-million dollar costs of a breach.
- Secure High-Value, Fragile Assets: Teams can protect legacy applications—those high-value but difficult-to-change systems—without the massive capital expense and operational risk of a full-scale rewrite.
- Reduce Response Costs: If a security incident does occur, runtime protection provides immediate, detailed telemetry that drastically cuts down on the time and cost of a response and forensic investigation. It turns a potential weeks- or months-long crisis into a contained, more manageable event.
In the end, the choice is clear. Pay the price of reactive remediation and accept the high risk of a devastating breach, or make a strategic investment in runtime protection and remediation. This investment minimizes a company’s cyber risk and safeguards their brand and reputation, ensuring a resilient, financially sound business.
To learn more about runtime protection and remediation, request a demo of Waratek Secure.
