How to Minimize the Hidden Costs of Physical Security Breaches with AI

Cybersecurity attacks are well publicized as they cost companies millions of dollars in losses, whereas physical security breaches are often overlooked. However, the consequences of such breaches extend far beyond immediate damage and can result in hidden costs that cripple businesses. Along with lost productivity from employee injury and turnover and property loss, they impact operations, cause reputational damage and increase insurance premiums. Organizations often don't recognize those as a consequence of physical security breaches and, as a result, underinvest in security. Whereas these risks can be effectively mitigated by embracing AI-powered security solutions that integrate advanced video analytics into their video surveillance and access control systems. In this article, we’ll reveal the impacts of physical security breaches and explore how companies can minimize such incidents, protecting their assets, employees, and reputation.

What is a physical security breach?

A physical security breach refers to an unauthorized or unwanted intrusion into a physical space, facility, or location that compromises the security and safety of people, assets, or information.

It involves gaining access to a secure area without proper authorization through exploiting vulnerabilities in access control systems, using stolen access credentials, or physically bypassing security measures. Tailgating is another common method used by intruders to circumvent access control systems. It occurs when an unauthorized person gains access to a secured area by following closely behind an authorized person who opens the door.

Physical security breaches also involve the theft of valuable assets, equipment, or confidential information, as well as acts of vandalism or property damage. This could include stealing valuable goods, breaking into storage rooms, or damaging surveillance cameras. They can occur in various settings, such as residential buildings, commercial establishments, industrial facilities, government offices, and public spaces.

One more example of physical security breaches is deliberate acts of sabotage or terrorism that not only cause harm to people and instill fear but are also aimed at disrupting operations.

In today's increasingly digital and interconnected world, organizations face a growing threat of cybersecurity breaches. At the same time, according to a 2021 Verizon report, 85% of cybersecurity breaches include a human element, in particular insider threats and physical breaches. 10% of cyber breaches are caused by a physical security compromise.

To prevent physical security breaches, organizations invest in robust physical security measures, such as access control systems, surveillance cameras, security personnel, alarms, and perimeter protection. Additionally, adopting advanced technologies like AI-powered video analytics can bolster security efforts and provide proactive physical threat detection and response capabilities.

What are the impacts of physical security breaches?

It's often difficult to quantify the effect of physical security breaches. While the immediate financial losses of such incidents are often apparent, there are also hidden costs that can have long-term consequences for businesses.

● Loss of customer trust

When a security breach occurs, customers may lose confidence in an organization's ability to keep its premises secure. This loss of trust can lead to a decline in customer loyalty and a decrease in sales and revenue. In addition, if confidential information is compromised during a breach, the trust of clients can be severely damaged, leading to a loss of business and potentially costly legal action. According to a study by Security Magazine, 85% of consumers say they will not do business with a company that has suffered a data breach, even if the company takes corrective actions.

● Damage to reputation

A security breach can significantly damage an organization's reputation. Surveys indicate that consumers would discontinue their relationship with a company if they experienced a security breach. A tarnished reputation can also have long-lasting effects on an organization's brand image, as rebuilding trust and credibility will take significant time and effort, hindering business growth.

● Legal liabilities and fines

Liability arises from a breach of duty of care, which means maintaining a safe environment to the best possible standard. Therefore, if businesses fail to comply with security regulations, they may face fines and penalties. The consequences range from damages for potential severe injury and death to breach of contract and bad publicity from legal action. Depending on the nature and severity of the breach, organizations may face legal repercussions and hefty fines. For instance, the European Union's General Data Protection Regulation (GDPR) can impose fines of up to 20 million euros or 4% of annual global turnover, whichever is higher, for data breaches.

● Increased insurance premiums

The financial impact of a physical security breach can also include increased insurance coverage. After organizations experience a security breach, insurers may view them as high-risk entities, leading to higher premiums that strain the organization's finances.

● Reduced productivity

Another hidden cost of physical security breaches are human costs, which range in severity but include stress, physical injury, and even fatalities as a direct result of assault or damage to equipment. This can cause employees to feel unsafe in their workplace and lead to decreased productivity and increased absenteeism. Additionally, if employees are required to work overtime to repair damages or improve security measures, it can lead to additional costs for the business.

● Staff turnover

A pervasive sense of fear and anxiety that employees experience after security breaches leads to a loss of trust in the organization's ability to protect them and their personal information. As a result, employees feel decreased job satisfaction and may seek alternative job opportunities that offer a more secure environment. Staff turnover is expensive because it involves the cost of recruiting. It goes with a lack of productivity while a new person learns the work as well as diminished productivity prior to resignations. All this highlights the significant impact of security breaches on employee retention and underscores the importance for organizations to prioritize robust physical security measures to retain their workforce and maintain a stable and motivated team.

How AI-powered video analytics helps reduce the impact of physical security breaches

With the increasing sophistication of criminals and hackers, physical security threats have become more complex and challenging to detect using traditional methods. As a result, organizations must adopt cutting-edge solutions to stay ahead of evolving threats. One of the effective solutions is to leverage AI-powered analytics that will add an intelligent layer to security systems, providing a proactive defense against emerging threats.

AI-powered video analytics is a revolutionary technology that leverages artificial intelligence and machine learning algorithms to process and interpret video data in real-time. By integrating this technology into video surveillance and access control systems, organizations can proactively identify and respond to security threats, minimizing the risk of breaches and their associated hidden costs.

AI-powered video analytics can recognize unusual activities and behaviors that might indicate potential threats. For instance, it can detect unauthorized individuals attempting to access restricted areas or unusual patterns of movement around sensitive assets. Scylla is the world leader in the development of AI-based video surveillance solutions. Scylla video analytics software automatically monitor camera networks for a range of security threats, including perimeter breaches, thefts, acts of vandalism, and active shooter incidents, as well as fire hazards and machinery overheating, ensuring continuous protection.

Ponemon Institute’s 2020 Cost of a Data Breach Report points out that it takes 223 days to identify a physical breach and 69 days to contain it. With real-time threat detection, security personnel can respond swiftly and prevent security breaches from escalating. Integrating AI-powered analytics with access control systems allows organizations to automate responses to security events. For example, if an unauthorized individual attempts to enter a restricted area, the system can trigger alarms, lock doors, and notify security personnel, ensuring a rapid and targeted response. Automatic identification of events means that issues are never overlooked, incidents are automatically logged for reporting, and relevant footage and data are immediately available to the security team, who can take action to address any problems. This makes your site safer, minimizing the impact of any incidents and, therefore, reducing the cost of breaches.

Leveraging AI technology often raises privacy concerns. However, AI-powered video analytics can be designed to respect data privacy regulations. By anonymizing and encrypting video data, organizations can adhere to legal requirements and protect individuals' privacy, avoiding potential legal liabilities.

Despite the initial investment required, AI-powered video analytics ultimately proves cost-effective by preventing security breaches and their hidden costs. It is a proactive approach that mitigates potential financial losses and reputational damage in the long run.