Data Breaches are on the rise, at a rate of over 20% increase in annual breaches and their direct consequences have always dominated the news headlines. Large companies such as Ashley Madison, Sony Entertainment and Target know firsthand, the consequences of a data breach.
According to an annual report by Ponemon & IBM in 2015,
- The Average Cost of Data Breach is $3.8 Million for a Medium to large sized company.
- The Average Cost per Record compromised is $154.
So how about we look at just a couple of examples on how Data Breach can impact a business.
Business Impact: Shall we let the numbers do the talking? The Data Breach case with for Target had a $162 Million price tag, and at the other end of the spectrum, Sony had a Data Breach price tag of $1.25 Billion. While these figures may sound astounding, impacts don’t stop there. There are hidden costs that comes with Data Breaches.
Brand Value: If you are an e-retailer such as Target, who holds payment information, or a holder of personal information such as Ashley Madison, your business is directly dependent on your customer’s trust that the information they provide will be safe and confidential.
Loss of Business: Once you break that trust, you have broken your brand image and certainly the business from those customers. With the amount of competition in the market these days, all it takes is one search in Google for those lost customers to find an alternative.
Customer Backlash: Take the example of Ashley Madison, not only have they lost millions in revenue, but they are also now facing a class action lawsuit amounting to $750 Million due to enraged customers. Realize that they grossed $114 Million in 2014 and are now facing a lawsuit almost 7 times their annual gross revenue!
And yet, we still have companies that have taken no measure to ensure security against such attacks, often using the same excuses over and over again.
“We are too small a company”: If you are a company that holds something of value to the customer, you must establish and maintain trust. Otherwise you will lose business. Small businesses should be even more aware because a Data Breach could cause the business to come to its knees. For Target, the $162 Million price tag is about 0.3% of their annual revenue, so they are able to shrug it off. But can your business take this hit? Chances are, that it cannot!
“Cyber security is too expensive”: While it is true that cyber security is not cheap, recent moves to the cloud have made things a lot simpler and a lot cheaper. Talk to experts to figure out what best suits your needs or where you are most vulnerable.
But it’s not the end of the world. There are things that can be done to deter hackers if you do not have tons of money to spend on cyber security right away.
Data Encryption: Encryption technology has grown over the years and with AES 256 bit encryption, you can pretty much rest assured that your data is not going to be readable anytime soon.
Data Dump: Do you have data you don’t need, or you don’t use? This is potential data that might be of use to Hackers but not to your company. Get rid of that data. Put it on a tape or store in the cloud, but get rid of that data from your server. Remember, as we have mentioned, it’s $154 per record stolen.
Data Backup: The easiest way to deter a Hacker or to minimize your business damage, is to have a solid Backup and Recovery solution. Solutions such as Nuage, encrypts your data, compresses it and backs it up to the cloud, and is ready for you to use whenever you need, with no infrastructure cost.
So invest in cyber security and implement ways to deter hackers. Protect both your data and your customer’s data, because they are trusting you with it. Learn from the mistakes of other companies and hopefully we won’t have another Ashley Madison on our hands in the future.