How Much Could A Data Breach Cost Your Business?

A data breach is the planned or unplanned release of confidential information to unauthorized parties. Data leak, data spill or UID (unintentional information disclosure) can also be used to refer to such situations. Data breaches come in many different ways. They may originate from pre-planned assaults by hackers or even from the careless disposal of data storage equipment. The cost of a data breach to a company is usually high, especially since such events usually lead to expensive lawsuits. This is why big, medium and small businesses typically spend a lot of money on their security software and IT infrastructure. The following are the negative outcomes of a data breach:

• Your business’s credibility will go down. You will have to spend a huge sum of money repairing your image and, at the same time, you will have to deal with the increased cost of your business’s insurance. To restore customer trust, you will have to invest a lot of money in your cybersecurity. You will also have to use your resources to train your staff on responsiveness to such attacks.
• Your business may suffer economic sanctions that are imposed by bodies which protect data. This will affect the profits of your company.

Other costs will include the investigation of the data breach, legal services, and public relations.

The type of data breach will also determine your overall costs. Here are the different types of data leaks:

• Malicious or criminal data breaches which account for about 48% of all cases globally. Sometimes, these cases are initiated by malicious insiders who have access to the data.
• Human error which accounts for about 25% of the cases.
• System glitches (faults) which account for about 25% of all data breach cases.

Data breach cases differ from one company to another. A data breach case in the USA could lead to a total loss of 6.3 million sterling pounds while in other countries like Brazil, the loss would be around 950,000 sterling pounds. The cost may increase significantly if your company’s response is slow. In the USA, if the data breach case is settled within a month, the cost can dip to 2.4 million sterling pounds.

The overall loss will also be determined by the usage of mobile apps and IoT (Internet of Things). Extensive use of Internet of Things technology will cost an extra 3.94 pounds per breach record. Mobile apps should also be secured tightly because a single attack could end up costing you millions.

Saving your Business from Data Breaches. Here are some ways of protecting your business from data breaches:

• Using a VPN- A virtual private network (VPN) produces an encrypted and safe connection. VPN’S are commonly used in branch offices and remote locations to securely access different resources and corporate applications. It is important to incorporate VPN’S into your business IT system to guarantee safety against data breaches. As a user of these tools, it is necessary to use authentication methodologies which include tokens, distinctive identification procedures, and passwords.
• Hiring a skilled IT team- Using trusted professionals will help you secure your business’s data. Personal data handling is the antidote to a data breach. Your business will require trusted professionals to help you recover data or forensics.
• Run tests on your systems- You should regularly connect your machines and try authentication of the machine in the network of your business. This will help you root out any issues in the system.
• Encrypt the backups on the network of your business. You don’t necessarily need to encrypt the live files.
• Keep an eye on your staff’s social engineering since it is the system used by hackers.
• Avoid using external communication channels for sensitive information.
• For critical systems do not use the 2-Factor Authentication
• Go beyond your business compliance like the GDPR laws and provide very high levels of security for your sensitive data.
• Train your employees to quickly and effectively respond to a data breach. Also, you should allocate special duties to individuals in the response team. For example, you will need someone to address the media in case of a data breach.

In the last few years, data breaches have not spared big or small businesses. Their costs have risen significantly over the last two years. For big businesses, costs of data leakages have risen to over 900,000 sterling pounds between March 2017 and February 2018. This is 24% above the losses incurred between 2016 and 2017. For small and medium-sized businesses, the average losses have been around 94,638 sterling pounds per data breach.

With GDPR (European regulation) coming into the scene, the cost of a data breach will increase significantly. In the Facebook versus Cambridge Analytical case that took place in the United Kingdom, Facebook was charged £500,000, which was a drop in the ocean if you consider Facebook’s turnover. If the case had been decided under the GDPR framework, Facebook would have been charged a lot more money.

Handling a data breach is remarkably costly. If you fail to invest in your company’s cybersecurity, your business may completely go under. Engage a trusted and qualified security team in order to avoid facing losses from possible data breaches.