How data breaches affect your business

How data breaches affect your business

It seems that data breach incidents are rarely out of the news these days. Last year’s high-profile Equifax breach resulted in millions of consumers’ private information being compromised. More recently, the press has been having a field day with the massive Under Armour hack, after the sporting accessory and apparel giant had experienced a breach that potentially exposed the sensitive data of some 150 million users.

Of course, data breaches of this magnitude are bound to make for scandalous headlines, but what’s scary is that if hackers are able to penetrate the defenses of large corporations like Equifax and Under Armour, where does that leave the average small- or medium-sized business?

Just because you have only 10 employees and don’t store sensitive information on your servers doesn’t mean you’ll be able to fly under a cybercriminal’s radar.

Why SMBs should worry about security, too

It’s all too easy to assume your company is safe simply because it’s mainly the large enterprises that make the news. But the truth is that smaller businesses are generally more attractive to hackers. Why? Because they often lack the resources to put in place strong cybersecurity practices, making them easy targets.

The devastating impacts of data breaches

The first question that may spring to mind upon discovering your data has been breached is, “How much is this going to cost me?” We’re not going to sugarcoat this, as the expenses incurred by a data loss incident can be significant. Your business may be affected in ways you have never considered. Just take a look at the following money-sapping consequences:

  • Digital forensics - If you accept credit card payments and discover that your clients’ sensitive information has been compromised in any way, Payment Card Industry (PCI) regulations state that you must be investigated. The examination would determine whether or not a breach had occurred and, if one had, how serious it was. Not only would your point of sale system need to be shut down, but you’d also be responsible for hiring the examiner yourself.
  • Breach disclosure - It’s not a pleasant task, but if information pertaining to your customers has been breached, you’re obliged to let them know. Notification letters will need to be issued and you may well find your resources -- both human and financial -- severely stretched as you correspond with these rightly anxious (and agitated) individuals.
  • Customer lawsuits - In the unfortunate event of a data breach, clients are eligible to file a lawsuit against you to recover their losses. You could end up paying huge fines if their private information has been used to commit fraudulent activity of any kind and the court decides that you were negligent.
  • Lost productivity - Dealing with the aftermath of a data breach is a time-consuming affair. You’ll be plunged into a nightmare scenario of appeasing customers, cooperating with forensic investigators, paying fines, and juggling finances. Normal operations will have to take a back seat while you try to contain the damage.
  • Damaged reputation - Suffering a data breach -- whether the root cause was internal or external -- can drastically diminish your customers’ trust. They would think twice about using your services or buying your products again. Also, don’t think that you can just sweep the breach under the carpet. It takes only a couple angry comments on your company’s social media pages for the news of your incident to spread like wildfire.

Don’t be the next victim
If well-known organizations can be toppled by data breaches, you might think you have little chance of avoiding one. But there are actually some simple steps you can take to lower your risks of becoming a target.

Start off by getting your staff on the same page about cybersecurity. Hackers often go after your enterprise data by preying on your end users, so it’s vital to train everyone to recognize common attacks like phishing and social engineering. Also, create policies for handling data in the workplace, set up firewalls and encryption keys to make it harder for criminals to access your data, and make sure your applications and operating systems are regularly updated and patched to guard against known vulnerabilities.

Now, these are just the bare minimum. If you want to take a step further to secure your organization, planning a robust security strategy is a must. Get in touch with our experts to discuss how we can protect your business before you find yourself in such a predicament.