The Effects of Data Breach in Businesses (Plus Prevention Tips!)

A data breach occurs when an unauthorized person gains access to sensitive, confidential, or otherwise protected data. It is defined as unauthorized access to sensitive information. This can be done through various means, such as hacking, phishing, or malware. According to a study done by IBM, the average data breach cost is $3.86 million. Not only that, but the number of records breached in 2018 was almost double that of 2017. With these statistics in mind, it’s no wonder that businesses are worried about data breaches.

Data Breaches are Becoming More Commonplace

As we mentioned before, data breaches are becoming more and more common. In fact, 43% of companies have experienced a data breach in the last year alone. That number will only grow as technology becomes more sophisticated and cyber criminals become more adept at taking advantage of vulnerabilities.

What Causes Data Breaches?

There are many different causes of data breaches, but some are more common than others. Here are four of the most common causes of data breaches:

  • Insider Threats: These are disgruntled or careless employees who have access to sensitive information and choose to misuse it.
  • Hacking: This is when an outside party uses malicious software to gain access to your systems.
  • Phishing: This is when cyber criminals impersonate a trusted entity to gain access to sensitive information like passwords or credit card numbers.
  • Malware: This is when malicious software is used to damage or disable computers and networks.

Common effects of data breaches

Most businesses are unaware of the significant impact of data breaches until it’s too late. A data breach can have immediate and long-lasting effects on a company, its employees, and its customers. Here are some of the most common effects of data breaches:

  1. Loss of customer trust and loyalty – One of the most immediate effects of a data breach is the loss of customer trust and loyalty. In today’s world, consumers are increasingly concerned about their online privacy and the security of their personal information. When a company experiences a data breach, it erodes customer trust and may cause them to take their business elsewhere.
  2. Reputational damage – In addition to losing customer trust, businesses also suffer reputational damage after a data breach. The negative publicity surrounding a breach can damage a company’s reputation and make it difficult to attract new customers.
  3. Financial loss – Data breaches can also lead to financial loss for businesses. Not only do companies have to pay for the cost of investigating and repairing the breach, but they may also be subject to monetary penalties if they have violated laws or regulations related to data security.
  4. Legal liability – In some cases, businesses may also face legal liability if they are found responsible for causing a data breach. For example, if a company fails to adequately protect customer data, it may be sued by affected customers for negligence.

Prevention tips

man with digital data encryption in his palm

The good news is that there are several ways to prevent data breaches. Businesses can significantly reduce the risk of a breach by taking steps to improve data security and awareness. Here are some tips for avoiding data breaches:

  • Get an ISO 27001 certification- ISO 27001 is the international standard for information security management. It provides a framework for businesses to implement security controls and procedures to protect their data. To get this certification, you need to work with an ISO 27001 auditing service provider. These experts will assess your current security practices and make recommendations for improvements.
  • Encrypt your data – One of the best ways to prevent a data breach is to encrypt your data. This makes it much more difficult for unauthorized individuals to access or use your data without your permission.
  • Implement security measures – In addition to encrypting your data, you should also implement other security measures like firewalls, intrusion detection systems, and access control lists. These tools can help block unauthorized access and protect your network from attacks.
  • Train your employees – Another critical step in preventing a data breach is training your employees on proper security procedures. They should know how to securely handle sensitive information and what steps to take if they suspect someone is trying to gain unauthorized access to your system.
  • Stay up-to-date on security threats – Finally, it’s essential to stay up-to-date on the latest security threats so that you can take steps to protect yourself against them. Cybercriminals are constantly coming up with new ways to access sensitive information, so it’s crucial to stay one step ahead by implementing the latest security measures available.

The bottom line

Data breaches can happen to any business, no matter how big or small. By taking steps to improve data security and awareness, you can significantly reduce the risk of a breach. Follow the tips mentioned above to help prevent a data breach at your company.

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