Data breaches are becoming increasingly common in today’s world. As businesses strive to improve data security to mitigate the risk of data loss, cybercriminals are also devising new ways to infiltrate and benefit from organizations’ sensitive information.
What Can a Cyber Attack Do to Your Business?
The consequences of a data breach can be so devastating since it involves many costs that can result in financial losses. According to Security Intelligence, the average cost lost during a data breach is $148 per compromised record.
Other consequences of a data breach may include:
- Losing sensitive data
- Business downtime
- Legal retaliation
- Skyrocketing costs
- Damaged reputation
1) Losing Sensitive Data
During a cyber attack, the attackers gain access to your customers’ confidential data, such as email addresses, images, credit card numbers, and debit card numbers. Your clients will likely find themselves to be the victims of identity theft, drained bank accounts, or worse. The consequences of a data breach can be even more devastating if the cybercriminals access the biometric data of your customers. Because biometric data is highly valuable, you’ll spend millions of dollars to compensate clients for the compromised data.
2) Business Downtime
During a cyber attack, business operations tend to stall as organizations investigate how a data breach occurred. Some businesses will even shut down all their services. Unfortunately, recovery from the attack can take anywhere from a few days to weeks or more.
If you take too long to recover from a data breach, your business might lose a significant amount of revenue. You’ll also have to compensate for all the affected clients. As a result, the productivity of your business will reduce significantly.
3) Legal Retaliation
It’s the responsibility of every organization to protect the personal data of every client in their database. If the sensitive info gets into the hands of cybercriminals, clients can take legal actions and claim compensation, whether the breach was intentional or not.
Many individuals in the U.S. are seeking monetary compensation due to data loss. An excellent example is the Equifax data breach that exposed 147 million people’s details. So far, the company has paid around $425 million as compensation.
4) Skyrocketing Costs
Data losses due to a cyber attack can be very costly. In a study conducted by Ponemon Institute, 43 companies in the U.S. lost about 4,200-13,000 records of data. With each record costing around $202, the total cost lost was about $848,400-$22,826,000.
So, what is the cost of a data breach? You’ll spend a lot of money to detect the data loss, notify victims, compensate the victims, and hire professionals to fix the problem. Your insurance premiums can also rise due to the data breach.
5) Damaged Reputation
A damaged reputation can result in multiple losses of revenue in your business. A study suggests that up to 33 percent of customers in the healthcare, finance, and retail sector will stop transacting with breached organizations.
Unfortunately, any news about a data breach will spread faster globally, tarnishing your reputation. International clients who fear losing data will cease to trust. They may move to other businesses that can protect their sensitive information.
Pro Tip: Your customers trust you with essential information, and allowing that information to be stolen breaks that trust. Improve your cybersecurity for your clients’ sakes and for yours.
Protecting Your Business & Clients
The consequences of a data breach can be very costly. You need to implement well-coordinated strategies that can protect your clients from the risk of data loss. That will improve your preparedness for cyber attacks and safeguard your reputation as a brand.
Get in touch with us for more information on cybersecurity.