Have you really considered the true cost of a data breach?
It might seem obvious: a successful security breach could give hackers instant access to your company's sensitive files and information. But have you really thought about the long-term impact this could have on your company's future?
Evaluating the consequences of a data breach is key to protecting your business. You need to know why you should care about a data breach so that you can take steps to prevent one.
That's where it gets tricky. If your company has never experienced a data breach, how are you supposed to know what one will cost?
Don't worry, we've done the work for you! At OnSecurity, we want to make sure you know exactly what a data breach could cost your business, and why it is so important to protect your network!
1) Financial loss
The most obvious impact of a data breach is financial loss. Businesses are popular targets for cybercriminals; hackers have much more to gain from attacking a company's network than targeting individuals. A report by IBM shows that the global cost of data breaches in 2020 is $3.86M.
If cybercriminals gain access to any of your sensitive data, they could steal money from you and your customers. However, there are other financial costs of a data breach that you might not have considered.
Researchers at IBM believe that the true cost of a data breach lies in these four areas:
- Detecting the breach – your company will have to spend money to investigate the source of the breach.
- Notifying customers – if your company is attacked, you'll have to notify your customers. Whether through phone calls, emails or letters, this will cost your company time and money to do.
- Responding to the breach – you might have to hire experts to help you resolve the problem, or maybe you'll appease customers with discounted prices. There are different ways to respond to a data breach, but all of them will cost your company time and money.
- Disrupting work to resolve the problem – a breach in your network will impact your revenue; you and your employees will be spending your time and money on resolving the problem. This disruption could take a long time to recover from, and some companies might struggle to get back on their feet.
The IBM report states that the average time to identify and contain a data breach is 280 days, and breaches that are found and contained in less than 200 days save business' around the world an average of $1M.
In some cases, hackers might try and blackmail your and your company. Just look at the attack on US tech company Garmin: it is believed that Garmin paid millions of dollars in ransom to their attackers in exchange for stolen data.
Imagine how much money you could save by protecting your company and preventing a data breach!
2) Damaged reputation
You might think that suffering a financial loss will be the biggest blow to your company, but a damaged reputation could have an even more significant impact on your business' future.
Customers want to be in good hands. They want to trust that their sensitive data is safe and secure. If your company becomes the victim of a data breach, your customers will question the safety of their personal information. Even if their data remains protected, customers might start doubting their choice to work with you, in case of future breaches. If word gets out that your company has been hacked, new customers might be deterred from contacting you, and give more business to your competitors.
A damaged reputation could be more detrimental to your company than any financial loss.
3) Weakened relationships
Investors and employees are crucial to your company's success, but a data breach might weaken your relationships. People that invest time and money in your company should be protected, and a data breach might make them doubt their decision to work with you.
In the long run, this will cost your company even more financially; investors might choose to spend their money elsewhere, while employees might find work with an employer that they can trust.