Cybersecurity breaches are one of the greatest threats to modern businesses. It’s not only the high profile breaches that make the headlines. Businesses of all sizes are vulnerable to attack and the consequences of a large-scale data breach can be devastating.
That is why many businesses are investing heavily in their infrastructure and data security, either through the adoption of managed IT services or other specialist security experts.
Data breaches can affect businesses in a number of ways, and the impact can be devastating.
The financial cost of a cybersecurity breach could affect the very survival of a company. A study by IBM indicated that a data breach could cost the average company $3.92 million dollars.
These costs include compensation, investigation fees, security consultancy, and IT costs. Depending on the nature of your security breach, you could also be liable to severe regulatory and legal penalties.
Devaluation of the Business
In 2016, the telecommunication giant Verizon was in the process of buying Yahoo when it came to light that Yahoo had suffered a data breach in 2013, exposing the sensitive information of over 3 billion accounts. Due to the reputational and financial liabilities of Yahoo, $350 million dollars was knocked off the original asking price.
While this is a high-level example, data breaches can reduce the value of your company. In a report by (ISC)², 49% of the mergers and acquisitions professionals surveyed said a deal would fail because of a data breach, while 86% said that a data breach would decrease the acquisition price.
Loss of Sensitive Data
Information is power. Should your sensitive data fall into the wrong hands, it can cause irreversible damage to your business and your customers. Popular data for cybercriminals to target includes financial information, names and addresses, biometric data, and IP addresses.
Every business relationship is based on trust. Data breaches can shatter that trust, especially if you have been negligent in securing your IT systems. Research by PCI Pal has shown that in the wake of a serious data breach, 83% of people would stop all spending with a business for several months. 21% said they would never deal with that business again.
Losing customer trust and loyalty is incredibly damaging to the survival of a business. This kind of trust is difficult to bring back.
The impact of a data breach has far-reaching consequences for your reputation. The PR backlash that can occur once the breach is known can damage your credibility with clients, suppliers, and partners. This in turn can lead to lower revenues and losses.
Take Steps to Secure Your Data
Businesses of all sizes across every sector need to ensure that they are taking all the necessary measures against potential data breaches. Engage with cybersecurity experts in order to assess your risks, identify any weaknesses, and design robust, secure IT systems.
If you do not have any security measures in place, it’s not a question of if, but when, your systems will be breached.