The Impact of Data Breaches on Companies: How to Safeguard Your Business?
An alarming rise in data breaches has been observed worldwide, since the majority of us use the internet as a second home in the midst of the global pandemic. Even if you’ve read about more significant hacks in the media or the impact of cybersecurity threats on popualr industries you shouldn’t assume that hackers won’t target your industry or business.
Cyberattacks are becoming more frequent in practically every industry area. According to the most current IBM Data Breach Report, “a startling 83% of firms had multiple data breaches in 2022.” According to the Verizon Data Breach Investigations Report for 2022, ransomware attacks increased by 13% overall—more than the growth of the preceding five years combined.
(Resource: Harvard Business Review)
A recent Kaspersky study found that more than half of the beneficiaries (57%) and more than two-thirds (71%) of medium-sized businesses (those with 250–549 employees) lacked a cyber security policy.
In the event that a breach happens, this disregard for cyber security exposes organizations to grave risk and places them under intense scrutiny from regulators and customers. To reduce the impact of a data breach on an individual or business, every organization, agency, or corporation need to be aware of actual scale of data breaches. The five effects of data breaches on businesses are listed below, along with any precautions you might take.
1. Financial Loss
Financial loss is one of the harshest and most noticeable effects of data breaches on companies. The average cost of this particular impact of data breach has climbed globally over the previous five years by 12% to £3.2 million, according to a recent Ponemon Institute survey.
Expenses may include compensating affected consumers, setting up incident response teams, investigating security breaches, purchasing additional security measures, paying legal bills, and other related expenses. In addition, there could be penalties for breaking the General Data Protection Regulation (GDPR).
2. Damage to Reputation
A data breach can have detrimental effects on a company’s reputation. Studies show that up to one-third of clients in the banking, healthcare, and retail industries will no longer do business with compromised companies. Furthermore, 33.5% of people will share their terrible ath on social media, and 85% of people will tell others about their experience. An adverse impact on the company’s reputation could result from a data breach.
Customers understand how important it is to secure their personal information, and they will quickly move to a rival who prioritizes security if businesses cannot show that they have put in place the required security procedures. Hackers may use this data to start new accounts or create fraudulent ones.
3. Downtime in Operations
Among the most adverse impacts of cyber threats,. Business operation can be significantly disrupted following a hack. Organizations need to investigate how the data breach occurred and what systems were accessed in addition to taking steps to contain it.
It might be required to halt all activities until the investigators have obtained all the data they require. Finding vulnerabilities could take days or even weeks, depending on how bad the incident is. This could have a big effect on revenue and an organization’s ability to recover.
4. Legal Case
Under data protection laws, organizations must attest that they have taken all necessary safety measures to secure personal information. Regardless of whether the security of this data was purposefully compromised, people may file a lawsuit to get compensation.
Class action lawsuits have been filed more frequently in the US and the UK as victims look for monetary compensation for the loss of their exposed data. Having a legal case is a very bad impact of a data breach on customers.
5. Sensitive Data Loss
The consequences of losing sensitive personal data due to a data breach can bring huge loss. Personal data is referred to any information that might be used, directly or indirectly, to find out an individual. IP address, credentials, name, and passwords are all covered by this. It also includes personal data, such genetic or biometric information, that might be utilized to identify a particular individual.
No matter how well-prepared your business is for a data breach, you can never be full-proof in the ever-evolving world of cyber security. A well-thought-out security plan is necessary to protect data privacy, reduce risks, and maintain your business’s reputation.
How to Prevent Data Breach: Solutions to Cyber Security Threats
It is imperative that you employ various measures to counter cyber security risks in order to avert the loss or compromise of your confidential consumer and corporate data. But before, you need to have a strategy in place. What to do when a cyber attack takes places in your business. Here are some essential steps to help you get started:
1. Create a customized cybersecurity strategy.
Cybersecurity should be a major priority for the upper management. If workers and IT specialists don’t believe that firm executives are concerned about a certain issue, they won’t either.
To mitigate cyber security risks, you must first determine which data should be prioritized for defense before making investments in your IT stack and hiring personnel.
Recognize your data assets.
There are different types of data. Certain objects will be more valuable than others. Finding out which data is most susceptible to theft is the first step. Typically, this is the data that requires the highest level of protection. That could be, for example, your customer database, which contains the contact and payment details of every customer. If their information is stolen, they will most likely to be the victic of phishing and fraud.
2. Strengthen your technological barriers.
Think about your IT stack next. Your data security plan’s implementation professional should be well-versed in all of the hardware, software, and Internet connection methods you utilize. Should they fail to do so, you might choose to hire a third-party contractor with expertise in database administration and network security.
As you begin building your technical defenses, focus on the following areas:
Protect points of connectivity with strong passwords and encryption: All equipment connecting to the internet, such as computers, laptops, mobile phones, printers, security cameras, and access control systems, must be safe. Each provides a means for data theft by hackers. It is recommended that all data entering and leaving your network be encrypted. This data cannot be decrypted without the right key, even if it is intercepted by a hacker.
Install a firewall and antivirus programs: Rogue software is prevented, detected, and removed from your computer by antivirus software, also commonly referred to as antimalware software. In order to ensure security, it quarantines any newly downloaded programs or files. In addition to your antivirus program, firewalls also provide reliable security. They act as a mediator between your IT network and the internet, gradually identifying the kinds of incoming and outgoing traffic that are typical. Until you inform the firewall that the source can be trusted, it will block traffic originating from a questionable source.
Restrict access to the most valuable data: As you prepare to prevent data breaches, consider what information each user must have access to for their work. For instance, the chief financial officer (CFO) and the receptionist do not require the same data or applications to be accessible to them. In the long run, limiting data access in this way will help you enhance the security of your data and systems. There is a very less possible that a hacker gains access to your system through the receptionist’s login, the damage they can cause will be limited to the places that your receptionist can access.
Track who’s using data and how: Knowing who is accessing what data from within your company is also crucial and one of the key solutions to cyber security threats. Analytics tools for user and entity behavior watch what workers who are logged into your system do. It can notify you of any attempts to download or view huge files or files that are ordinarily inaccessible to users.
Update your apps and software: On the day of release, make sure that your IT team gets the most recent updates for every piece of software and application on your network and any linked devices. When a vendor learns of a security flaw, they frequently offer fixes to safeguard customers. Additionally, you must cease utilizing any programs and applications that are no longer supported by their vendors. Lastly, ensure that staff members are unable to download illicit software onto your cloud server or network to prevent cyber security threats in the long run.
Protect your website: These days, a lot of firms use websites as an essential component of their technology. Detectify and Intruder are two examples of penetration test tools that you may use to examine your website and find any active vulnerabilities. Additionally, confirm that your SSL and TLS certificates are registered and updated.
Sum Up…
This was a comprehensive overview of the impact of cybersecurity threats and the effective solutions to them. If you are a business owner, you need to take precautions in advance to protect your company’s assets and data. You can safeguard your business and recover from cyberattacks and data breaches by comprehending the vulnerabilities, creating a proactive cybersecurity program, educating staff about the risks and steps to mitigate them, and purchasing cyberinsurance to protect company assets.
