Technologies are evolving at a breathtaking pace, and along with the growing number of technological advancements and conveniences that they bring to our lives, the number of potential threats also grows exponentially. One of the most serious damages that any company can experience is a data breach.
Security has always been the top priority for any organization. However, nowadays, it’s challenging to provide the required safety level that will eliminate a chance for potential data breach issues. In this article, we will take a look at what is a data breach, what are the main damaging consequences of a data breach and how to protect your data from being stolen.
Definition of a Data Breach
Data breaches are related to security issues and mean unauthorized access to secure and highly confidential information. A data breach is a serious problem that can harm the operational processes of any business, as well as negatively impact the overall reputation and cause financial detriment.
There are different types of data breaches, such as stolen information, ransomware, phishing, password guessing, viruses, malware, denial-of-server attacks, and so on. Taking into account that almost all the data that companies possess are stored online, cybersecurity is a burning problem that needs to be addressed timely and effectively. Moreover, it’s mandatory to enhance the security level to prevent potential threats and protect your confidential data.
Core Data Breach Vulnerabilities
Before we tackle the essential after-effects of a data breach, let’s get a better insight into what are the main vulnerabilities that can lead to such a serious problem.
Your employees who have access to all the confidential and sensitive data and are unfamiliar with the latest security measures can increase the risks of internal attacks and data breaches.
Therefore, it’s important to take care of internal security. For example, all terminated employees should no longer have access to any internal information. Also, it’s recommended to check all employee’s accounts for suspicious activity regularly.
Unprotected Mobile and Other Devices
If your employees use personal mobile devices for job-related processes, it increases risks for a data breach. Also, in case your team brings their laptops to work in the office, you have less security control over the data used, which can cause a potential threat.
Cloud Storage Apps
More and more companies are using cloud storage applications, which are very convenient, as such software makes it possible to access any data at any time from any device within seconds. However, cloud solutions are prone to security threats and can appear as one more channel for cyber attacks and data leakage.
Third-Party Service Providers
If you turn for help to third-party service providers, then you are at a higher risk of data leakage, too. Since outsourcing is a cost-effective solution, many businesses delegate some tasks, including software development, to other companies. If the system of such a service provider isn’t secure enough, all data you provide the company with are at a higher risk of being stolen.
Downloading malware from the Internet can increase the risks of the data breach. It can happen when employees click suspicious links or visit untrustworthy websites. An outdated operating system can also multiply the chances for data leakage.
The Four Most Harmful After-Effects of a Data Breach
Now you are more aware of the main aspects that can lead to data breaches, so let’s explore the main harmful after-effects of information leakage.
1. Significant Financial Loss
Depending on its type, a data breach can be light or pretty expensive and lead to a significant financial loss, which always comes damaging for a business. A data leakage will result in additional security costs, market share value loss, as well as costs spent on compensating affected customers. Here are factors that make a data breach expensive for a company:
- According to the laws, a business has to inform authorities and their customers in case of a data breach. If the company fails to comply with the law, it will have to pay regulatory fines.
- In case a data leakage involves sensitive customer data, such as credit card info, a company might be subject to a costly lawsuit or pay other legal fees.
- For improving the overall data security, a business will have to invest more in enhancing data security and protection.
- A company might also lose many customers that would no longer trust your business. Though it’s hard to calculate revenue loss, one thing is clear that it’s going to be large.
2. Undermined Reputation
News about the data leakage will spread in a blink of an eye, and it will negatively impact your brand reputation. A data breach will result in lost customer trust, and the chances are high that they will never turn to your business again.
What is more, the affected users can also share their negative experiences with other people. Such damage will be unmeasurable and devastating for any company.
It will not just repulse existing and potential customers but negatively impact stakeholders’ retention and company image as an employer. It’s going to be much more difficult to attract top industry talents, and you will certainly struggle with finding investors further on.
Taking into account that damaged reputation is hard to recover, a company will have to spend additional costs on PR and marketing activities to restore its public image, get trust back, nurture leads, and increase revenue.
3. Business Operational Process Disruption
A data breach is a serious issue that requires some time not just for the recovery process but for the investigation, as well. During this time, all operational business processes will be negatively affected.
Certain types of data leakage may result in a loss of essential business information that forbids any operational processes. Companies that have encountered such severe data breaches usually shut down all operations until the cause and recovery plan is defined. It’s important to find the source of the violation and the solution on how to fight the consequences.
In its turn, the suspension of all operations will lead to a significant client base loss and, respectively, revenue loss. On average, it takes approximately six months for a business to get back on track after such a cyber attack.
4. Legal Consequences
Another devastating after-effect of data leakage is significant legal consequences that might cause a lot of troubles for the business. As it’s been already mentioned, in case confidential personal information of your customers has been involved in data leakage, it may result in a class-action lawsuit.
In this case, a business will be obliged to pay compensation sums to the victims via a lawsuit. All legal and settlement fees are extremely costly, and you will face lots of expenses. Sometimes, a company can even get restricted from any business operation until a legal investigation is done.
As you can see, data breaches are a serious security issue that has to be treated with the highest focus and attention. Any company or business can encounter this detrimental problem, and effects can be very frustrating.
Facing a cyber attack is costly. What is more, it can damage the overall reputation, undermine the internal and external operational processes, cause revenue loss, as well as customers’ loss of trust.
Therefore, it’s of paramount importance to ensure the highest level of security to lower your risks for a data breach and protect all confidential information. If you are in search of reliable data security services, reach out to RSI Security, and get professional assistance today.
About the Author: Anzhela Sychyk
I`m a Market Researcher and Technical Writer at TheAppSolutions. I like to learn new things about modern technologies and share knowledge through value-added content, helping entrepreneurs build businesses in a more effective way.