Today’s society has grown all too accustomed to hearing yet another well-known company listed in the headlines as the latest victims of a massive data breach. By the time we hear this news, the company-and often its customers-have already suffered losses. Some of these losses are obvious, like the loss of data stolen by hackers. There are also significant hidden costs of data breaches that were recently calculated as high as $350 million in a July 2018 global study conducted by IBM.
The hidden costs of data breaches include:
Lost business:
While a company is recovering from a data breach, their systems might be down or compromised. Some companies elect to cease operations all together until security can be restored. The cost of this lost business adds up by the second. Most of these breaches stem from a malicious or criminal attach (instead of a glitch or human error) so in addition to repairing the damage, cybersecurity professionals must also shore up the vulnerabilities that allowed the attack to happen in the first place.
Lost time:
While the damage accrues quickly, the process to identify and contain a breach often does not. According to this latest report, companies took an average of 197 to identify a data breach. Once identified, it takes an average of 69 days to contain the breach. If companies were able to contain a breach faster (i.e. in less than 30 days), they saved over $1 million dollars. There’s also the hidden cost of shifting employee resources and time during a breach or containment period. Work and focus on current projects often shuts down as all hands on deck address the crisis. In the cast of a large company, this can also demand an entire marketing campaign to message the results of the breach and company response to customers.
Lost reputation:
The reputational damage caused by a data breach can be the most painful to bear for companies. These costs are often hidden because it’s difficult to capture clients who would have been had they not heard of a company’s breach. Customers also seem to react and respond differently depending on the type of data lost in a breach. In a 2011 study on the impact of data breach on company reputation, most people surveyed were more concerned if their personal, confidential information was lost or stolen compared to their employee files. They also estimated that it would take 8 months to 1 year for a company to recover from the damage caused by a breach. Communicating a breach early, thoroughly, and providing updates to customers were noted as best practices to preserve and regain reputation following a breach.
Recognizing the hidden costs of data loss should provide additional motivation to pursue a dedicated data loss prevention strategy. Whether you own a company or have your data saved by hundreds of companies, we’re all impacted by data breaches. Challenge the companies that you trust your data with to protect it as if it was their own.
source: securedatarecovery.com
