Can your company afford the impact of a data breach?

Fri, 04/26/2013

Despite the majority of companies experiencing or anticipating significant cost and business disruption due to a client and/or business information data breach, they still struggle to take the proper measures to prevent an incident.

Studies have shown that a majority of companies have already or are very likely to lose customers and business partners, receive negative publicity and face serious financial consequences due to even a small data breach.  However, despite these consequences, many companies struggle to take the right steps to prevent an incident, clearly showing a need for better awareness and investment in the knowledge and tools that can alleviate such an occurrence.

The damage experienced by a company after a data breach has lasting negative effects on brand equity and reputation. Reports have shown that the average time it takes to restore an organization's reputation is at least one year, but usually longer. In addition to the time and energy it takes to rectify the situation, a data breach has the potential to severely affect a corporation's brand equity over the long term.

A solid and secure reputation is a company’s greatest asset and must be protected at all costs.  It’s imperative that a culture of data security be cultivated from the top down.  All types of businesses whether they be one man operations to fortune 100 companies need to prepare themselves from all types of data breaches from electronic means to hard copy format.

Companies that suffer data breaches experience significant costs and business disruption, including the loss of revenue and trust from customers, negative media attention and costly legal action.

  • 76% of privacy professionals say their organization already had or expects to have a material data breach that results in the loss of either customers and/or business partners.
  • 75% say they have had such an incident which resulted in negative public opinion and media coverage.
  • 66% of companies understand that they will suffer serious financial consequences as a result of a single data breach.

Ironically, some companies still continue to improperly handle confidential and protected data and refrain from implementing campaigns to help prevent future incidents.

  • Despite experiencing a breach, not all companies prepare for a future breach.
  • A majority of organizations still don't provide clear communication and notification to victims following an incident which in itself is a violation to many laws such as FACTA, HIPAA and HITECH.
  • Organizations are lacking the security measures and policies to prevent a future occurrence or understand the impact both internally and externally of an incident.

Organizations need to prioritize the methods and procedures as well as the prevention of data breaches. With statistics mentioned here, can your company afford the impact of a data breach?