The number of data breaches that affect companies and consumers increases virtually every year. Between 2018 and 2019, data breaches grew by 17% (from 1,257 in 2018 to 1,473 in 2019).
To make matters even more frightening, security experts believe that the pandemic has created even more vulnerabilities for hackers to attack.
Each breach creates an opportunity for hackers to cause costly damage to organizations. Protect your business by learning about the following five consequences of data breaches and how to avoid them.
1. Loss of Valuable Data
Today’s companies rely on data for just about every day-to-day task. Many businesses collect data about their customers, processes, lead generations and social media interactions. It takes much more than tracking sales to find success in the digital world.
When a data breach steals useful information, you lose the ability to track emerging trends, streamline your processes and target customers with meaningful interactions. In other words, your competitors gain an advantage that gives them time to build relationships with your customers and increase their sales while you suffer.
2. High Costs from Ransomware and Other Attacks
Data breaches often come with direct and secondary costs. Ransomware demands, for example, can cost thousands or even millions of dollars.
When a ransomware group attacked Garmin, the company spent $10 million regaining access to their data, website, satellites and other technologies. While most ransomware demands fall below $100,000, smaller businesses can fail after losing as little as a few thousand dollars.
You also need to consider the secondary costs of business interruption, clean up, reviewing security protocols and other issues. A data breach can become expensive quickly.
3. Penalties for Regulatory and Governance Violations
Governments and professional organizations recognize that businesses need to take data security seriously. A series of mandates encourage companies to follow security measures that protect the data of consumers.
Some of the most common regulations include:
- HIPAA, which can cost up to $1.5 million per year in fines for violators that don’t take steps to protect patient data.
- PCI DSS, which has fines from $5,000 to $100,000 per month for failing to protect credit card information.
- GDPR, which can charge €10 million or 2% of the company’s worldwide revenue for violations, whichever is greater.
Clearly, you do not want to run afoul of these regulations. They carry steep fines. In some cases, violations can even lead to confinement.
4. Loss of Trust of Customers and Clients
A data breach can ruin trust in your brand, and it can take years to repair the damage. Unfortunately, you may not have years to bring customers back to your brand. According to one survey, 81% of respondents say they will stop engaging with a brand online after a data breach.
Customers might still shop at your retail locations, but they will avoid your e-commerce sites. Considering that e-commerce sales continue to grow, your brand will have a difficult time reestablishing trust while staying in business.
5. A Damaged Reputation that Prevents Future Growth
Even when a data breach doesn’t force your existing customers away, you will find it considerably more challenging to attract new customers. Once people know that a data breach has occurred in your organization, they will suspect that you don’t take their security seriously. Instead of spending money on your products and services, they will look for alternatives that have histories of better security.
How to Avoid Data Breaches with a Cybersecurity Consultant
Unless you have a large IT department, adequately protecting your organization from data breaches is a complicated task for most businesses. Even large companies with dedicated IT departments get attacked. Instead of relying on in-house professionals, outsource your needs to a cybersecurity consultant experienced with:
- 24/7 security monitoring
- Using VPNs for secure data access
- Identifying potential vulnerabilities before hackers take advantage of them
- Creating comprehensive security reports that include action plans for improvement
Cybersecurity has become a crucial area of investment in most industries. Get the help that you need to protect your business and customers. And consider cyber insurance.
To learn more about AxiaTP’s cybersecurity services, contact us today.