Corporate cybercriminals are becoming smarter, bolder and more determined than ever to gain financially using attacks such as phishing, malware and ransomware. This leaves many businesses vulnerable and scrambling to maintain the integrity of their data. Others may feel that such criminal practices are unlikely to affect them. If you fall into this latter category it’s time to take a careful look at how data breaches impact your business.
Often, the direct result of a data breach is a financial impact on your business. This may come in the form of a ransom payment, compensation to affected customers, legal fees, lost sales, the costs of retrieving data and resurrecting breached systems or future security costs. As cybercrime has become more profitable, fewer hackers are doing it just for fun. Making money is the biggest reason motivating cybercriminals these days. If you’re wondering how data breaches impact your business, your financial bottom line will likely be at the top of the list.
A data breach can have a massive impact on your company’s reputation. This is especially the case if the data that was compromised belongs to your customers. When customers provide you with sensitive personal and financial information they expect to be protected from its unlawful use. If your business is found to be at fault for putting that information in jeopardy you may not only lose your current customer base but your future customer base as well. A company that becomes known for lax data security may also be associated with other failings – whether deserved or not. Data breaches impact your business credibility.
A data breach could cause you to lose important intellectual property. If research, strategies or trademarked materials are stolen, your business may be put at a competitive disadvantage. Trade secrets are often what distinguishes a leading company from its competitors. Having those secrets disseminated against your will could lead to your eventual downfall. In certain fields of business, intellectual property is far more valuable than physical property and needs to be protected accordingly.
If your company deals in sensitive information, a data breach will likely result in legal problems. Organizations that are required to protect sensitive information could find themselves in litigation with regulatory bodies, governments and customers. Dealing with litigation is not only severely distracting it can also be financially devastating. Legal problems can cause your primary business functions to be relegated while you have your day in court.
A data breach can suddenly bring your business to a halt. Companies that are heavily dependent on IT, computing and data can find themselves completely locked out from their core functions as a result of a successful hack. Even a relatively minor breach can cause significant downtime as the systems are examined, cleaned up and recovered. In certain cases, compromised data can result in a business that’s unable to function for long periods of time.
A data breach can often lead to external and internal investigations, finger pointing and scapegoating. This can have a disastrous effect on employee morale. The period following a data breach is when an organization needs to pull together and work towards rectifying the situation. However, it can also result in employee dismissals, resignations and a culture of fear and blame. Keeping your data safe can also be vital to keeping your employee morale safe.
To learn more about how MBC’s can protect your business from cyber threats, get a free assessment today.