Data Security Breach: How Data Theft Can Impact Your Business
It takes a very short amount of time for a data security breach to occur. The report on Verizon’s 2016 Data Breach Investigations indicates that 93 percent of data breach cases took less than one minute to occur. Surprisingly enough, 80 percent of the cases were not detected and reported for more than one week.
As the world continues to become more connected, there is a growing risk of online security for businesses. Business data, especially related to customers and payments, becomes a target to criminals and competitors. Criminals can use this data fraudulently, placing your business in turmoil.
The size of your business does not matter when facing a data breach. It can deeply affect every part of your organization, from the day-to-day operations to the marketing or even the finance department.
As a business owner, you need to fully understand the consequences of a data breach on your business to better prepare yourself for the future. Here are some of the ways a data breach can impact your organization.
The most significant impact that you can face after a data leak is a financial loss. The amount of loss you incur is dependent on the type of data breach. One single attack can cost you millions of dollars and can stretch for the next few years. The costs can be due to market share value loss, compensation fees to customers, or additional security fees.
According to the law, you need to inform the necessary parties about a data breach. Failure can result in having to pay regulatory fees. Moreover, you may have to pay very high legal fees in case of a data leakage that involves sensitive customer data such as credit card information.
A data leak can further cause customers to lose trust in your business leading to a drop in the overall revenue.
Loss of trust and Diminished Reputation
The long-term consequence you may have to face is a diminished reputation. When word of your data leak begins to spread, it reaches all corners of the world within a blink of an eye. Customers lose trust in your business, and the probability of them returning zeros down.
The effect can also be made worse if you did not take the necessary precautions, and the press gets wind of the story. Further, more people can take their stories online and share negative experiences about using your product or service. The damage can be unmeasurable and devastating.
The effect affects your customers and your stakeholders, as some of them may want to pull out their investment. Once your company’s reputation is damaged, it may take several years and a lot of money to recover.on how to protect your organization and prevent damaging your reputation.
When a data breach occurs, you need enough time to conduct the investigations and get to the bottom of the problem. You also need time to recover and resume normal business practices. During this period, your day-to-day operations may become disrupted.
If there was an essential business data loss, the operations might have to stop immediately until the problem is resolved. A suspension of operations can lead to significant losses of revenue and client base.
A data breach is a serious security issue that you should treat with the greatest concern. The damage that your business may incur can be detrimental, and the effects can be very frustrating. Not only is it costly, but it can destroy your reputation and stop your daily operations.
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