If your business has not been the victim of a data breach, consider yourself very lucky. When you look at how data breaches affect companies, you’ll see the wide-spread and damaging consequences a cybersecurity breach can be.
It’s a huge mistake to think that your company will never be the target of a cyber attack. Breaches occur far more often than most of us realize. Many companies try to downplay them to avoid some of the consequences. Others may not know that their data security has been breached. One UK study shows that 88% of UK companies were breached in 2018.
5 Ways That Data Breaches can Affect Businesses
The cost of a data breach might be immeasurable and affect a company in many different ways. Here are some of the most damaging effects.
- Compensating Affected Customers – Almost every bit of damage a breach does to a company is underestimated, and this one more than most. From setting up help desks for affected customers, to legal fees in defending against potentially massive lawsuits, including class actions, due to the loss of personal customer data.
- Lost Revenue – Cyber attacks can bring down internal systems and websites that can severely disrupt the company’s ability to keep revenue streams flowing. Not to mention the potential sales to customers lost due to malfunctioning sites and systems.
- Damaged Brand Reputation – The optics of a data breach are never good. But the nature of the data loss can make things worse. For example, a single email, lost in a cyberattack, can contain a message that was intended to be kept private, but that becomes explosive when made public.
- Loss of IP – For many companies, their intellectual property may be one of their most valuable assets. And it could be lost in a data breach.
- Many Other Costs – In addition to the better-known “surface costs” of a cybersecurity breach, there are many often unseen and immeasurable costs. These can include the cost of investigating the breach; the cost of plugging the weakness in your system; fines, and even increases in your insurance premiums.
From your document storage procedures, and the internal policies you maintain around the access and use of your systems and data, you can’t take too many precautions against data security breaches.
If you found this post helpful, check out our article “3 Business Risks of Bad Document Management”.