According to statistics, a data breach will cost the average company about $3.86 million and is predicted to cost more than $150 million by 2020. This statistical study also indicated that 78% of internet users still click on unknown and unsecured links, in spite of knowing the risks.
With all these numbers in mind, it’s now become imperative that you protect your valuable data from malicious third party attacks to avoid the consequences of a data breach on your business. And if you’re wondering what these consequences are, then continue reading this article, as we will list the top consequences of these of kinds of cyber attacks.
Here are the worst-case scenarios resulting from poor data management:
1. Suffer a security breach
In the last few years, nearly half of the businesses in the United States have reported one data breach or breach attempt. And if you have a large organization, then you probably have a considerable amount of stored data. This means that you’ll have a higher risk of being targeted by cyber attacks attempting to jeopardize your data security. These possibilities increase up to 66% for medium firms and 69% for larger firms
2. Compromise customer’s data
In 2017, the infamous data breach of Equifax compromised over 800,000 personally identifiable data belonging to their UK consumers, as the data was accessed by cybercriminals. The consequences and scale of this data breach will be enough to terrorize any company, especially businesses that deal with sensitive customer information. Here are some examples of a customer’s sensitive data:
- Credit card information
- Personal identification codes
- Digital signatures
3. Risk your employees’ data
You probably know that your employees’ actions will have a significant impact on your organization’s data security, as social engineering is commonly used to gain unauthorized access to any classified information effectively. A sensitive employee data on your company will just be as valuable as your customer’s information. Thus, security processes and procedures must be strictly implemented for both customers’ and employees’ information. Here are some examples of sensitive employee data:
- Social security numbers
- Checking accounts
4. Financial setbacks
If your business system gets infiltrated by a malicious third party, the first thing you’d do is stop all operations until the security breach is resolved. This downtime process can substantially affect your business’ revenue inflow. Financial setbacks can be in the form of the following:
- Hiring expensive IT security professionals to do the cleanup
- Loss of customer trust
- Regular clients going to your competitors for product purchases
5. Risk intellectual property
A data breach on your intellectual property can have severe consequences for your company, as this information can be used by your competition to produce similar products and services to compete against your business. This kind of breach can quickly escalate if not discovered and contained immediately. Here are some examples of valuable intellectual properties:
- Product specifications
- Proprietary software
- Scientific formulas
- Drawing and manuals
- Marketing test and symbols
6. Reputation damages
One of the best assets of a company will be its good reputation, and continuous efforts must be made to nurture and maintain its integrity constantly. However, if your business becomes a victim of a data breach, it’ll significantly damage your reputation, no matter how established it is. Although data breaches will have various negative effects on different organizations, businesses that have experienced these kinds of attacks have reported adverse effects on their reputation. Here are some of the effects of a damaged reputation:
- Loss of customers
- Loss of products or services
- Organizational failure
7. Business closure
More than half of the organizations involved in major data breach incidents fail within two years after an incident occurs. So, it’s imperative to keep your systems safe at all times to keep out cybercriminals.
Being attacked by cyber criminals means that you failed to comply with data protection regulations, this makes you legally responsible for paying penalties. As regulatory authorities get stricter with fines up to $24 million, or 4% of the business’ annual revenue, whichever is higher, these penalties can significantly add up to your business’ financial setbacks.
Businesses nowadays, mostly rely on technology to help with their day to day operations. Making it more important for business owners to protect their systems and networks from threats of cyber attacks. May this article encourages you to invest in your cybersecurity to avoid these consequences and comply with data protection laws. Always remember that preventing a data breach will still cost less than having your business suffer from one.