11 Ways a Data Breach Could Crush Your Business
Your data is important. Strike that. It’s critical to your business. It helps you make better business decisions, accelerate your sales, and improve your profits.
Theft of company documents from your database can lead to a loss of trust, damage to brand reputation, and lost revenue. Could this happen to you?
Data is stolen at an alarming rate. 68 records every second. And small businesses are the victims of 43% of data breaches. Despite the advance in data security capabilities, data theft is increasing.
Research from The Identity Theft Resource Center shows that the number of data breaches in the first nine months of 2021 was 27% higher than the total number of breaches in the whole of 2020. The average cost of a data breach is rising, too ─ up to $4.24 million per incident, and the highest amount since 2004, according to a study by IBM and the Ponemon Institute.
How damaging could the theft of confidential business information be to your company?
Here are 11 consequences of corporate data theft that you’ll want to avoid at all costs.
Regulatory bodies levy hefty fines for breaches of security regulations. How big can the fines be? Well, the EU dished out fines of almost €1billion in the third quarter of 2021 alone.
Under GDPR rules, the EU can fine up to €20million, or 4% of global turnover. Mega fines to date include €90million for Google, €225million for WhatsApp, and €746million for Amazon.
And in the United States? the highest fines here include:
But regulatory fines are only the start of your problems.
A ransomware attack can be devastating to your business. Imagine all your operations being blocked unless you pay whatever the cybercriminals want. These criminals are clever, too, knowing exactly how much they should ask and how much you will pay to save your business. Just how damaging is ransomware?
In July 2020, US travel firm CWT Global paid a ransom of $4.5 million after 30,000 of its computers were taken down and two terabytes of data were compromised. But this pales in comparison to the $50million demanded from computer manufacturer Acer.
There’s no disputing that your business will be disrupted by a data breach. You may need to halt operations completely, while your systems are secured, and your databases are cleaned. There will need to be an investigation, to understand what happened and why. The process can take days, weeks, or months.
How costly could this be for your business? You should do the math.
Employee productivity issues
If your company data has been stolen, you should also consider the knock-on effect on your staff. They will be concerned that their personal data will be used to steal from the bank accounts, or their identity used to open credit accounts in their name. They’ll need to change passwords for all their online activity.
The stress could damage their home life and personal relationships ─ and unhappy employees never work at the peak of their productivity.
Forensic investigations take time to conduct, and they don’t come cheaply. But without determining the cause, you’ll never get back up and running successfully. It’s crucial to know what was attacked and how.
A data breach could irreparably damage your reputation. Even the most loyal customers could move their business elsewhere ─ and almost a quarter of companies find they lose customers after a data attack. Can you afford to lose customers? And can you afford to lose them to your competitors?
Difficulty to find new customers
As easy as it is to lose customers after a corporate data theft event, flip the coin over and you’ll find it’s at least as tough to win new business and new customers. I mean, who wants to do business with a company that cannot look after its own business, employees, and customer data? Prospective customers’ due diligence could make them avoid you like the plague ─ social distancing times a million.
Covering the costs of the victims of identity theft
Here’s one reason why the costs of a data breach can affect your business for months and years after the breach. Your company will probably be liable for all costs associated with any services that the victims of identity theft pay for. That could be any amount, but industry stats suggest that it averages out at around $100 per victim, per year for up to two years.
If you’ve had corporate data stolen, you will be viewed by insurance companies as a high-risk client. It’s going to be harder to get insurance, and, when you do, you’ll probably find that your insurance premiums have gone through the roof.
Remediation costs can be huge. You’ll need to update and upgrade hardware and software. You’ll need to plug the hole that allowed the data theft or loss to occur. You may need to replace outdated software (and that’s expensive), invest in new IT services, security measures, and computers, and redesign your data protection strategy.
As if the costs haven’t amounted to more than enough to date, you must be prepared to be hit by lawsuits. That’s a whole layer of new legal costs, as well as a potentially unlimited amount of damages.
Get a grip on data protection before corporate data theft strangles your business
Owners of all businesses, big and small, must get a grip on their data protection and cyber security. The consequences are too high not to. Small businesses are at much risk as large. A lack of protection leaves holes in your security that can be exploited.
The bottom line is that if you don’t prepare and protect, your business is at risk of corporate data theft, and all the consequences that follow a data breach. Can you afford for your data security strategy to be less than 100%?
Don’t allow data theft to steal the keys to your business. Discover if your business is protected before it’s too late. Contact Millennium Tech today, and we’ll show you how we can help protect your company against cyber threats.