Are you confident that your organization would not experience a data breach? If I were you, I wouldn’t be. Recent studies have confirmed that 88% of organizations in the UK were breached last year in some way, shape or form – and the USA is doing no better.
The consequences of the breaches vary drastically, with some breaches being imperceptible from the inside. It’s very possible that you have already been breached and you just don’t know it yet. It takes a long time, on average, for organizations to detect and respond to a data breach. In that time, untold damage could be being done.
How Does a Data Breach Affect a Business?
There are a number of different ways a data breach can affect your business, ranging from inconsequential all the way through to crippling. The actual effects you will experience will often depend on the cause of the data breach. Most people, when they consider the consequences of a data breach, are most concerned with the financial repercussions. Data breaches being with them several financial penalties, including:
- Compensation for the affected individuals.
- Cost of responding to the breach in terms of investigations.
- Damage to share prices.
- Regulatory fines (which can be severe) if a compliance regulation is broken.
The Consequences of a Data Breach to Reputation
We live in a world where negative stories are shared rapidly across digital channels, often gathering millions of views, likes, comments and shares. We also live in a world, in part thanks to new (well publicized) compliance requirements, where consumers understand the value of data and their right to data privacy and security.
Together, this has created an atmosphere where data breaches affecting consumer data tend to be heavily reported on by the press. Many studies have shown that a company suffering from a data breach will lose a significant amount of trust with their customers. Loyal customers can turn away, investors lose interest and stock prices fall.
You’ll find no sanctuary on social media or in the press either, as the likely backlash will be significant. You’ll have a lot of explaining to do. The only way you can really recover from this dent in reputation is to prove to people that you have taken proactive steps towards better cybersecurity for the future. Even so, your company will always have the spectre of the data breach looming over you.
The Consequences of a Data Breach to the Bottom Line
There are a number of reasons why data breaches affect companies financially. Firstly, if the documents lost in a data breach have any information that is important to the business, it’s likely that growth will slow. Say, for example, one of the documents lost was a valuable research report that you were using to plan next quarter’s go-to-market strategy. You will likely have to start from scratch if this report is lost.
Secondly, data breaches can affect the day-to-day operations of a business, and it goes without saying that downtime can be financially crippling. You will also have to take into account what the damage to reputation we previously talked about will have on the bottom line. Research shows that companies suffering from a data breach generally underperform against the market average for a significant period of time during the fallout.
Research form the 2018 Data Breach Study highlights a few key statistics on the effect data breaches can have financially:
- A data breach resulting in the loss of one million records could cause up to €36m in losses.
- A data breach involving 50 million records could cause up to €314m in losses.
- The average cost of a record lost in 2018 increased to €133
- Companies in the healthcare industries are the most at risk of suffering costly data breaches, incurring losses of €366 per record.
How Sensitive Data Affects Data Breach Consequences
You are more likely to experience the most disastrous after-effects of a data breach if said breach involves sensitive personal data. Personal data includes information related to an individual, including names, addresses, credit card data, biometric data and even political leanings.
Depending on your industry and the data you store, breaches involving sensitive personal data can be potentially devastating beyond just financial and reputational damages.
Most breaches involve simple PII, like names, credit card information and addresses. These kinds of breaches can result in fraud or cybercrime involving the effected users. This is no picnic. However, breaches involving even more sensitive personal data can result in catastrophe. For example, if a critical patient at a hospital had their medical records deleted or lost in a data breach, lives could be lost.
Biometric data is also potentially a gold mine for attackers. You can reset your password or cancel your credit card, but you can’t reset a fingerprint. Users who have had their biometric data stolen will forever be aware that said data could be used against them in the future.
It is therefore compulsory that if you are handling sensitive personal data, you take the utmost caution with your data security efforts.
How Lepide Can Help
What are you currently doing to proactively improve cybersecurity and protect valuable data? Do you know where your most sensitive data is, who has access to it, what your users are doing with it and whether your environment is secure? These are the kind of questions you need to be able to answer if you’re going to detect a data breach or even prevent a data breach from happening.
If that sounds like a lot to ask, you might need some help. Lepide Data Security Platform is an automated data breach detection and prevention solution that can help you answer all of these questions. It will continuously monitor and report on changes being made to your critical data, systems and permissions. Best of all, it will automatically detect anomalous user behavior and alert you so that you can react quicker to potential breaches.