What impact will a data breach have on your company?
Starting a business takes a lot of effort. It would be catastrophic to lose anything as a result of a data breach.
Unfortunately, we recently learned of a small business that had run into this issue. Faced with the prospect of legal action as a result of a data breach, the company had no choice but to close its doors permanently.
What is a Data Breach, Exactly?
Any unwanted, unintentional, or unlawful access to data is considered a data breach. Any unapproved access to data, whether it is damaged, lost, changed, or simply copied, indicates that your data has been violated.
Data breaches can happen in a variety of businesses and industries. Since different sectors, such as healthcare, banking, government, education, and entertainment, have different enforcement criteria, they must function differently to contain, minimize, and address the effects of a data breach.
What factors contribute to a data breach?
External hacker attacks are the most well-known cause of data breaches, and although they account for the majority of them, unintended breaches account for 1/4 of all confirmed breaches. If one of your suppliers is hacked, it could give them access to your data or passwords that can be used to access your systems, which can have a direct or indirect effect on you.
The following are some of the more serious implications of a data breach:
- Reputational Damage
A security breach can have far-reaching consequences that go beyond your short-term sales. Your brand's long-term image is also on the line.
For one thing, you don't want your emails to be leaked. In most cases, you'll want to keep these emails private.
Customers, on the other hand, respect their privacy, and data breaches often include payment details. Potential customers would be wary of a company that has a history of poor data protection.
- Loss of Sensitive Data
Revenue loss and a tarnished reputation can be disastrous. Hackers can, however, target designs, tactics, and blueprints in some cases.
Manufacturing and construction companies are particularly vulnerable to this attack. Smaller companies always assume they will not be affected. However, small companies are the subject of 60 percent of hacking attempts. This is due to the fact that they are easier to assault.
The loss of intellectual property may have a negative effect on your company's competitiveness. Any competitors would not hesitate to use stolen information to their benefit.
- Taking Legal Action
Organizations are legally required to show that they have taken the possible measures to protect personal data under data security regulations. Individuals may take civil recourse and demand compensation if their data is breached, whether intentionally or unintentionally.
In both the United States and the United Kingdom, class action cases have risen dramatically as plaintiffs demand monetary compensation for the loss of their records.
- Operational Downtime
In the wake of a data breach, business processes are often interrupted. Companies must contain the breach and perform a comprehensive review into how it happened and what systems were accessed. It's possible that operations will have to be shut down entirely before investigators have all of the answers they need. Depending on the seriousness of the breach, this phase can take days or even weeks. This can have a significant impact on sales and a company's ability to recover.
The average cost of network downtime, according to a survey, is about $5,600 per minute. This works out to about $300,000 per hour. This will obviously vary depending on the size of the organization and the sector in question, but it can clearly have a devastating effect on company efficiency.
- Loss of Revenue
It's not uncommon for a security breach to result in significant revenue loss. According to studies, 29 percent of companies that experience a data breach lose money. A whopping 38 percent of those who lost income did so by 20 percent or more.
A broken website, for example, could lead potential customers to look for alternatives. However, any downtime in an IT system will cause work to be disrupted.
What options do you have?
Finding out how the GDPR works and what it means for your company and industry should be your first priority if you don't fully comprehend the problem.
To stay compliant, you'll almost certainly need to update your IT and privacy policies. It's also important that you inform your employees about the latest legislation and any policy changes.
If you don't have the time to thoroughly analyse and plan, the best choice is to partner with a seasoned cybersecurity firm that is well-versed in GDPR.
We have the experience at Teceze to audit your existing processes and determine which elements are GDPR compliant and which need to be changed. We will help you stay compliant and prepared for these new digital security regulations.
Data breaches can happen in a variety of businesses and industries. Since different sectors, such as healthcare, banking, government, education, and entertainment.