Data breaches come with a heavy cost as the damage from these incidents is not limited to one aspect of an organisation’s operations. Losing sensitive data will hurt a company in many places, creating liabilities and limitations that can take many years to overcome. Indeed, the long-term cost of a data breach is nearly higher than what most business owners think as it includes lost opportunities and competitive disadvantages that cannot be quantified. But, when your company assesses its risks, it should take into account all the costs that might incur following a data breach and secure access management. These costs include the following:
Usually, the most obvious cost of a data breach comes in the form of legal settlements. Companies that experience a breach may pay out millions of pounds in consumer class action suits and settlements with banks, private settlements, and individual lawsuits. Plus, the hours of attorney time can push the total legal costs higher than the publicised amounts.
Loss of consumer confidence and bad publicity can slow the sales of a company for many years. Big corporations may survive a series of bad years in a row; however, smaller organisations can be forced to shut down completely after a data breach.
Organisations in some industries could be penalised for failing to protect some forms of data. In Europe, the GDPR supervisory authorities can fine companies as much as 4 percent of their top-line revenue for not being able to protect personal data.
As a company’s financial statements bleed from the top and bottom line because of a breach, shareholders portfolios and retirement accounts will take a hit. Surveys show that breaches in the UK can cause a typical company to lose around 2 percent of its value after a data breach, usually costing its shareholders millions. That is why corporate boards are starting to take a serious interest in the cybersecurity vulnerabilities of their companies.
In today’s digital economy, there are a lot of threat vectors and opportunities for data security to go wrong. The breach can begin with a malicious insider, a careless employee, or an external hacker, leaving your sensitive data in the wrong hands. That is why you must rethink your security strategy to reduce the adverse effects of a breach. You can make this happen by protecting your information with automated data security and persistent data encryption. Also, deploy the best identity and access management solution to ensure your data can be accessed only by authorised personnel.