Data breaches are, unfortunately for organizations everywhere, becoming likely events rather than worst-case scenarios, as more and more organizations are learning. There are a variety of safeguards businesses can implement to reduce their risk, but even with good data security in place, a breach can happen.
So, what do you do? And what is the outcome if your organization is breached? Read on to uncover the risks of a data breach, how to get ahead of hackers, and what to do if your data has already been compromised.
What Constitutes a Data Breach?
Data breaches include any unauthorized, accidental, or illegal access to data. Whether the data is destroyed, lost, altered, or simply copied, any unapproved access to data means your data has been breached.
Data breaches can occur in all types of organizations and industries. And because different industries, including healthcare, finance, government, education, and entertainment follow various compliance requirements, each must work to contain, mitigate, and resolve the impact of a data breach differently.
Related Reading: 5 Ways to Protect Your Financial Organization From a Data Breach
Data breaches of sensitive personal information tend to be the costliest and have the most effect on organizational reputation. Personal data is highly valued, and in 2017 personally identifiable information (PII) like name, birthdate, and gender made up 36% of compromised records among financial institutions, surpassing even banking and credit card information.
Risks of a Data Security Breach
There are three initial risks of a data breach, alongside a variety of long-term impacts that put your organization at risk:
1. Financial Losses
A data breach is going to hurt. The cost of a data breach has steadily increased over the years, and the average price tag was recently estimated at $3.92 million by IBM, but that number increases for organizations in the U.S. or in healthcare.
Related Reading: 8 Ways to Protect Your Healthcare Organization from a Data Breach
Further, any regulation you adhere to, like the GDPR for Europeans or PCI DSS for anyone collecting credit card information, may impose fines and penalties because of the data breach, compounding financial losses.
Altogether, costs can include:
- Compensating affected customers and assisting them, such as with credit checks and dedicated help lines
- Investigating the incident and implementing measures to prevent a recurrence
- Investing in new ways to safeguard your data
- Losing current and future customers
- Paying regulatory fines and penalties
Related Reading: How the Coronavirus is Impacting Your Data Security
2. Loss of Trust and Reputation
A data security breach can impact your carefully-built reputation. Alongside immediate payments to mitigate a data breach and pay any fines, you also risk loss to revenue as customers leave and fewer potential customers choose your organization over competitors. IBM announced that “lost business was the biggest contributor to data breach costs” in 2019.
Consumers expect that organizations use their sensitive personal information responsibly, and as new consumer data protections are rolled out, many are increasingly expecting businesses to be proactive about safeguarding personal information as well. Organizations that have shown they failed to do so may be less attractive to consumers.
3. Impact to Your Business
Some business impacts may include:
- Losing intellectual property, and thus losing a competitive edge if others take advantage of the stolen information
- Disrupted business operations while the breach is contained and investigated
- Legal action that keeps your organization in the news for the wrong reasons – and further impacts your bottom line as penalty amounts increase
Related Reading: 3 Lessons Learned from a Data Breach
With thousands of courses a data breach can take, the consequences on your business can be unique and far-reaching.
Compliance After a Data Breach
Businesses are subject to different compliance requirements based on industry and either their or their customers’ geographic locations. Each requirement or regulation has strict stipulations for data loss – with some including fines.
For instance, the GDPR, like many requirements, has immediate to-dos for organizations who have suffered a data breach: notify a supervisory authority and notify any data subjects (those impacted by the data breach). Timeliness matters with notification; many regulations impose further penalties or fines on organizations who fail to take action or notify the appropriate groups quickly.
Was Your Data Breached?
We’ve written extensively on how to reduce your risk, what to do if your data was exposed, and how to prepare for a data security breach. Whether you’re finding yourself in a data breach scenario or merely taking steps to prevent one, jump to these resources:
If you think – or know – that you’ve been breached, take a look at the critical steps to take right out of the gate.
First, identify the type of customer data exposure you’re dealing with (internal, database/public server, or full infiltration) then follow 6 steps to effectively and safely respond to the event.
Before a breach impacts your organization, ensure that you’re prepared. Examine – or create – your cybersecurity policy, ensure you’re adhering to compliance requirements and other guidelines, educate your employees, and make sure your cybersecurity policy and any software you use enhances your security, rather than detracts from it.
Brush up on the best cybersecurity tips practices. See which of these you’re already following and which could use some improvement.