Every day, businesses continue to take advantage of information technologies. The instantaneous nature of transactions in the digital age has forever changed how companies are run. Unfortunately, conducting business digitally is not without its risk. There always exists the risk of one of the most serious emergencies a business can face today: a data breach. If a business is digitally storing or moving any kind of data, it is at risk of being intercepted by a third party. Business must take steps to minimize the damages a data breach can cause and reduce the chances of them occurring.
One of the most common causes for a data breach is a malicious attack. Attackers are preying on vulnerable companies using increasingly sophisticated techniques to breach their systems. In general, data breaches that occur as a result of criminal activity result in large amounts of customer attrition and can be disastrous for the business.
These data breaches could easily cost a company millions of dollars. According to an IBM-sponsored study conducted by the Ponemon Institute, the costs of data breaches are at an all-time high. After a breach, a company can expect to lose $7.01 million on average. Not only do they have to tank the costs of closing the breach and paying legal fees, but they face significant amounts of lost business due to reputation loss.
What to do:
These breaches often go undetected for long periods of time. The longer a breach goes undetected, the more it will eventually cost the company. A single stolen record can easily cost a company upwards of $200. Multiply that by 1,000 or 10,000 lost records, and the costs become exorbitant. This does not take into account the other costs associated with reputational harm, fines and penalties, and investigation. When a breach goes undetected for long periods of time, vast numbers of records are stolen, leaving companies with huge costs. As soon as a data breach is detected, time is of the essence. The hole in the system must be plugged as soon as possible in order to reduce damages.
Waiting until a breach occurs to take action shows inadequate preparedness. Ponemon concluded that up to 70% of businesses are not adequately prepared for the occurrence of data breaches. In order to accelerate response times, information security teams must be in place before an attack occurs. This allows the business to stop intrusions as soon as they are detected. Also, employees at all levels of an organization must be trained to deal with the event of a data breach. The faster a business can respond, the more they will save.
Data breaches are only becoming more prevalent. The amount of data being stolen is increasing, along with the costs of the damages. The Ponemon study shows that fortune consistently favors the prepared. While implementing tighter information technology systems may result in larger overheads, the result is worth the significant reduction in stress when facing data breaches.
In addition to preparedness, it is highly recommended that all businesses of all sizes explore Cyber Insurance, which covers all of the associated costs with a breach, and provides a team of experts ready to assist and repair the damage. What used to be optional insurance is now absolutely mandatory for a business to operate in the digital age. Cyber Insurance comes in many different forms, and it is highly advisable to speak with an experienced insurance agent who specializes in Cyber coverage to ensure that the right policy is obtained.