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Privacy Investment Brings Bigger Profits, Cisco Study

Are good privacy policies good for business and individuals, Cisco asks in its new report built on data gleaned from its annual Cybersecurity Benchmark Report of 2,800 security professionals worldwide.

In each of the last three years, the networking giant has surveyed organizations to learn if they reaped benefits from privacy beyond meeting compliance requirements. In other words, does spending on privacy deliver tangible value such as lower breach costs, shorter sales delays and higher financial returns? The data shows that it does, Cisco said.

“Over the past few years, data privacy has evolved from ‘nice to have’ to a business imperative and critical boardroom issue,” Cisco said in its report, From Privacy to Profit: Achieving Positive Returns on Privacy Investments. “Today, people are asking more questions about how their personal data is used, and they now view privacy as an important component of a company’s brand.”

Here are some top-level findings:

  • More than 40 percent of organizations in the study are seeing benefits at least twice that of their privacy spend.
  • A strong correlation exists between organizations’ privacy accountability and lower breach costs, shorter sales delays and higher financial returns.
  • More than 70 percent of organizations receive significant business benefits from privacy, such as operational efficiency, agility and innovation.
  • 82 percent of organizations view privacy certifications as a buying factor when selecting a supply chain product or vendor.

Here are some drill-downs:

On privacy spend.

  • The average annual privacy spend was $1.2 million. Among large enterprises (10,000 or more employees), average spend was $1.9 million, and 2 percent of these enterprises spent more than $5 million. The average privacy spend of small businesses (250-499 employees) was $800,000, and 41 percent of them spent less than $500,000.

On benefits.

  • The average estimated benefit was $2.7 million. Large enterprises estimated their benefits at $4.1 million, and 17 percent placed the value at more than $10 million. Small businesses estimated their benefits at $1.8 million.

On return on investment.

Across all companies, for every dollar of investment there was roughly $2.70 worth of benefit. Nearly half (47 percent) of the companies are seeing greater than a twofold return, 33 percent are breaking even, and only 8 percent appear to be spending more than they receive back in benefits.

“Most organizations are getting a very positive return on their privacy investments,” Cisco concluded. “Future research will explore how these investments, benefits, and returns might change over time in response to evolving privacy regulations and customer expectations worldwide,” the company said.

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