The latest annual IBM and the Ponemon Institute report on the cost of data security breaches in various countries across the globe, released earlier in 2018, reiterates that enterprises should prioritise their security.
The study compiled research conducted in 15 countries across the globe and revealed that the cost of data breaches was rising. The research also highlighted that finance, service, industrial manufacturing and technology industries were hardest hit by data breaches and that most of these breaches were caused by malicious criminal acts.
Despite advances in IT security infrastructure and a broader understanding of the risks, the report did stress that all companies – be they in Japan or Brazil, in the retail or research industries – should take security seriously. This is especially important when you consider that the ramifications of system downtime or a cyberattack extend much further than your business’s bank balance.
Here are a few hidden costs of a data breach that you might not be aware of:
Insurance premium increases: According to Deloitte, companies can experience as much as a 200% increase in premiums for the same coverage after an attack. They can even be denied coverage altogether if they can’t prove that they have bolstered their defences.
Operational disruption: You will suffer financial repercussions if your business isn’t running as it should on a normal day. Generally, a breach or a malicious attack means that all resources are focused on righting the ship, which can see certain tasks falling by the wayside.
Damage to customer relationships: Studies show that targeted companies are likely to experience significant reputational damage. A cyberattack can cause customers to lose trust in the business. Loyal customers might move over to a competitor because of the fear that you are not keeping their information safe.
Loss of revenue: Unsurprisingly, if your systems aren’t running, and your customers are flocking to your business rivals, you’ll experience a drop in revenue. In 2013, when the US’s second-largest discount retailer, Target, fell victim to a data breach, it reported a 46% drop in profit and sales fell by 5.3% as security concerns scared off customers.
Intellectual property loss: Deloitte describes this as an intangible cost because it’s difficult to put a value on things like trade secrets and investment strategies. But the ramifications can be huge when criminals have access to your designs and business ideas.
Don’t become a cybersecurity statistic, it’s best to take a proactive, rather than a reactive approach. With data security continuing to be a concern for businesses globally, make sure that you have the right solutions in place.
Want to find out how protected you really are? Download our Enterprise Risk Assessment Checklist to better understand your security strengths and weaknesses.