Data Breach

Data Breaches And Their Impact On Businesses

Magazine Money

“Cybersecurity has become a necessity in times like these where cyberattacks like data breaches have become common and can cause a lot of potential damage to an organization’s reputation and finances”

Cybercrime has significantly increased due to the growing dependence on the IT sector within businesses small or big and also with the Covid 19 pandemic, the internet is the only way people can connect to their friends and family. Clearing off the misconception that only large-scale companies are harmed because of frauds, many cybercriminals target smaller and mid-sized companies in particular because criminals know they don’t have as much to invest in their cybersecurity efforts.

 

WHAT IS A DATA BREACH?

Data breach exposes sensitive, personal, and confidential information, and the information is then accessed by an unauthorized person who can change it, corrupt it, and mainly uses it for personal benefits, the files involved are viewed and shared without permission. Anyone can be at risk of a data breach — from individuals to high-level enterprises, hospitals and governments, most importantly, anyone can put others at risk if they are not protected. As our computers and mobile devices get more connective features, there are more locations or endpoints for data to slip through. New technologies are being introduced faster than we can protect them, devices in the IoT sector are proof that we have been increasingly valuing convenience over security. Almost all “smart home” products have gaping flaws, like lack of encryption, and hackers are now taking advantage and since new digital products, services, and tools are being utilized with minimal security testing, we’ll continue to see this problem grow.
However, even if the backend technology was set up perfectly, some users will likely still have poor digital habits or lack awareness. All it takes is one person to compromise a website or network that causes a lot of damage. Weaknesses or carelessness in technology and user behavior can lead to data breaches.

Without comprehensive security at both the user and enterprise levels, one is almost guaranteed to be at risk. Protecting yourself and others starts with understanding how a data breach occurs and how we can take safety measures, this is why cybersecurity is becoming increasingly prominent and every employee should be well informed about it.

 

FINANCIAL IMPACTS OF DATA BREACH ON BUSINESSES

Data breaches can be extremely costly for a number of different reasons. Firstly, Many smart IT teams will allocate money in the budget towards dealing with potential data breaches. It can cost a lot of money to even identify the breach and fix it. Unfortunately, once the damage has been inflicted, the costs will end up being long-term.
It’s not just the monetary cost of repairing the breach, it’s the consequences of the breach occurring in the first place. Companies suffer from a downgraded reputation and an awful PR when they experience a breach. Customers will lose trust in the company’s ability to keep their data secure — and considering the fact that you may have their credit card information, fewer customers may be willing to do business with you again. Everything involved with this consequence, from the loss of revenue to the cost of acquiring new customers, results in a lot of monetary loss.

Other financial consequences include:

  •        potential penalties for improper cybersecurity
  •        legal fees
  •        discounts
  •        incentives in an attempt to retain customers, and the investment in identity theft protection for current customers and employees.

According to many trusted reports and sources, around 60 percent of all small to mid-sized businesses that experience a data breach end up going out of business within half a year of the breach taking place.

data breach
Image Credits: CSO Online

PREVENTION & REDUCING THE RISK OF DATA BREACHES

In the above section, we understood how data breaches are unbelievably expensive and can cause a lot of damage to the company suffering, now it is important to learn how businesses can prevent this from happening and this is why cybersecurity plays a crucial role:

1)      Encryption – Encrypting your data is a method of converting information into a code to prevent unauthorized access, which can safeguard sensitive data and other important intellectual property. Even though encryption cannot stop a data breach from happening, it can block cyber attackers from accessing the sensitive data once it’s stolen, thus mitigating the risk.

2)      Train the Employees – The weakest link in cybersecurity is the company’s employees. It doesn’t mean malicious, disgruntled employees purposely sabotaging your business, although that scenario can be possible. It’s more likely a lack of attention to detail, and not following protocol, either due to becoming negligent, or not understanding the security process. Reduce the risk of a data breach occurring by training them on how to avoid such mistakes (such as downloading attachments to emails from senders they don’t know about, and keeping their computers locked when they’re not at their desk).

3)      Install Security Software – Installing modern anti-virus and malware software as well as firewalls to help keep your systems secure is another crucial element.

4)      Dismantle Old Hardware – Data can be retrieved from old hardware even if it has been deleted. Destroying old hard drives and computers through a reputable data destruction company or experts who have the equipment necessary to shred your old hard drives.

In conclusion, data breaches are one of the most common cyberattacks businesses are affected by, and Being prepared for a potential data breach will allow you to take the appropriate actions quickly if it ever happens. Also, assessing your current security protocols will always help to strengthen the security measures immediately. 

 

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