Tech blogger and contributor Andriana Moskovska details the threats posed to businesses by compromised data and how to avoid a data breach.
According to recent statistics, more than 14.72 billion records have either been stolen or lost because of a data breach since 2013. In fact, there are far more compromised records than there are humans on earth. Companies should take heed to such statistics, since anyone can be the victim of a data breach.
Big or small, threats to cybersecurity are all around us, so it is imperative that we keep our walls high and mighty. Here are some reasons why cybersecurity is such an important department to focus on.
Long lasting negative impact on reputation
In this age of advanced technologies and digital reliance, almost everyone understands how valuable data is. People believe that companies should be responsible and caring enough when it comes to their customers’ information. Once a company suffers from an effective data breach, it will begin to lose its customers’ trust as well.
The negative impact on a company’s reputation can lead to a loss of loyal customers and investors, and an inability to gain new ones. The good thing is that companies can recover by showcasing better cybersecurity practices the second time around. However, the fact will always remain that a company lacked data protection at one point in its history.
Heavy financial losses
From the get-go, data breaches will cost companies a ton of hard earned money. To begin with, if important data or documents are lost during a data breach, it goes without saying that companies lose momentum. This is common when there is a loss of valuable research and customer insight in the aftermath of a breach.
Companies will also lose valuable working days after a data breach, as they may not be able to immediately resume operations. This “lost business” also results in financial losses. Other reasons for financial loss after a data breach include negative impact on reputation and time spent on recovery for the company and its employees.
The 2018 Cost of Data Breach Study by IBM Security highlights a few statistics regarding a company’s financial losses:
- A data breach involving 1 million records can amount to losses of nearly €36m.
- A data breach involving 50 million records can amount to losses of €314m.
- The average cost of each lost record increased from €126 to €133 from 2017 to 2018.
- Companies in the healthcare industry lose €366 per record.
It also concludes that the losses companies face are ramping up each year, as the value of data increases and breaches become more common. Depending on what region or country the company is in, it can also face more losses due to fines and penalties, as obligated by data protection laws and regulatory commissions.
The European Union is one of the pioneers of data protection laws since the General Data Protection Regulation (GDPR) passed last year. One of the heaviest fines to come out of GDPR was issued to the US-based company Marriott International and amounted to $123m (€110.34m).
According to the UK Information Commissioner’s Office, 100 million of the 339 million guests whose data was compromised in the Marriott International breach were EU citizens; which explains the heavy fine. The data that got leaked in the breach included personal information such as names, addresses, passport numbers, and even bank account details.
However, the largest fine the EU has issued to date – over £183m (€200m) – was to British Airways. It stems from a customer data breach which allegedly began in June 2018 but was only discovered in September the same year.
Although there are no solid data protection laws in the US yet, companies are still fined for their shortcomings regarding the protection of customer data. Just recently, the Federal Trade Commission (FTC) hammered down a $5bn (€4.49bn) fine on Facebook in the wake of the Cambridge Analytica scandal.
Companies can face massive losses after a data breach. While large enterprises will be able to recover the losses at some point, smaller businesses will tend to struggle.
Cyberattacks are growing more fierce
Hackers are becoming more aggressive when it comes to organising breaches. Companies which fail to utilise effective cybersecurity practices early on will have issues in the long run, as they will have a lot of issues to catch up to. As hackers become more adept, cybersecurity solution providers must work twice as hard to cover all exploits.
The moment businesses fall back on implementing the proper practices and solutions, they will become more susceptible to data breaches. Of course, the issues discussed above will follow suit one by one as well. But if companies grow along with the new cybersecurity practices, they will be able to stay a step ahead of hackers, thus minimising the risk of becoming a victim.
The importance of cybersecurity may be immeasurable, but the losses that companies incur after a successful data breach are. This importance will continue to ramp up as the value of data deepens. There is no better time for a company to strengthen its cybersecurity with safer practices and appropriate solutions that put customer information and valuable data at the forefront.