What a Data Breach Could Cost Your Business

Think you can fly under the radar when it comes to a data breach?  The costs of dealing with the aftermath of a data breach are significantly higher than preventing one.

If your business has been playing with fire, ignoring the very real risks of a breach, it’s time to take a closer look at what you’ll really be paying when the data breach happens.

It happens to business of all sizes

It’s not just the bigwigs that hackers target. While companies like Sony and Home Depot have made headlines after hackers exposed their vulnerabilities, midsize and small companies are just as susceptible to a data breach.

In fact, small- to medium-sized businesses may be more at risk. While large and public companies tend to have solid infrastructure in place to prevent a breach, hackers know that small companies generally don’t protect themselves.

You don’t want to be forced to do something about your business’ security, having to deal with the financial repercussions of leaving your business exposed  –  as well as having to rebuild your reputation and trying to convince customers that doing business with you is a safe endeavor.

What’s at stake

You’ll lose money in the event that you experience a data breach. But you’ll also endure:

  • Business interruption
  • Stolen property (intellectual and otherwise)
  • Reputation damage.

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The true cost of turning a blind eye

There are a variety of weaknesses a hacker can exploit. Here are the types of incidents that can occur and how often they happen:

  • Data  –  11%
  • Mobile devices  –  15%
  • Applications  –  10%
  • Systems  –  18%
  • Networks  –  16%
  • Humans  –  14%

Once the data breach occurs, here’s a breakdown of the impact of the breach:

  • Confidential records are compromised  –  30%
  • Customer records become compromised  –  34%
  • Employee records are compromised  –  35%
  • Identify theft happens (either your clients’ or employees’ information is stolen)  –  19%
  • Internal records are lost or damaged  –  20%

 

When a breach happens, here’s a look at where your business will be feeling its effects:

  • Lawsuits and legal exposure  –  8%
  • Financial losses  –  22%
  • Intellectual property theft  –  20%
  • Brand and reputation repair  –  28%
  • Shareholder value loss  –  5%
  • Extortion  –  5%
  • Fraud  –  12%

 

The cost breakdown of how a breach will affect your business varies. But the average cost-per-record stolen is now around $170. If you lose 10,000 records, that cost will quickly add up  –  without considering the financial repercussion on your reputation, business interruption and lost customers.

Here’s what retail establishment could have to pay after a data breach:

  • Merchant processor compromise fines  –  $5,000 to $50,000
  • Forensic investigation fees  –  $12,000 to $100,000+
  • Onsite Qualified Security Assessor (QSA) assessments  –  $20,000 to $100,000
  • Free credit monitoring for customers  –  $10 to $30 per card
  • Card re-issuance penalties  –  $3 to $10 per card
  • Breach notification costs  –  $2,000 to $5,000+

Solving the problem

As your company invests in technology, consider creating a plan to put security measures in place to protect your business. The main areas of concern include cloud computing, social media and mobile devices, as well as data storage, network and hardware.

Put the matches down, and stop playing with your business security. Talk to a professional to learn how to put a plan into place that will grow your cybersecurity and protect your best assets: your reputation and your revenue.

Does your company have a cybersecurity plan in place to prevent and thwart data breaches?

 

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