How Common Are Data Breaches? What Risks Do They Pose?
When we hear about data breaches and IT security failures in the news, they’re linked to large corporations and businesses. There’s often a feeling that these breaches occurred due to the size of the organization in question; they were big, obvious targets, so of course they’d be targeted by cybercriminals.
The issue with this perception is that it’s not particularly accurate.
While we often assume that data and security breaches only affect those large enterprises, the fact of the matter is that a significant amount of cybercrime targets small and medium-sized businesses. After all, speaking pragmatically, smaller businesses are less likely to have the same security precautions as their larger counterparts.
It’s more important than ever to ensure your organization has reliable cybersecurity measures in place. The cost of a breach in your security goes far beyond lost data and can have serious impacts on your organization.
How Common Are Data Breaches?
According to Statistics Canada, over 21% of Canadian businesses reported an impact from a cybersecurity incident in 2017. While large businesses are still prominent targets, nearly 20% of affected businesses are classified as SMB.
Cybersecurity specialists at Varonis estimate that some form of cyber attack occurs every 39 seconds and that by 2020 the average cost of a data breach will exceed $150 million.
In fact, there’s reason to believe that data breaches aren’t becoming more common, just more visible. More companies are now legally required to report data breaches thanks to changes to the law.
Ransomware attacks have increased massively in the last few years, too, presenting an even more malicious attempt to extract and extort money from businesses of all sizes. These attacks hijack and lock up your system, extorting money in exchange for returning control and access.
All this is to say that data breaches and other cybersecurity incidents are far more common than might be expected. What’s more, they carry serious costs beyond the bottom line.
What’s at Risk?
User Loyalty and Trust
Unfortunately, when a data breach occurs—regardless of the cause—the client’s frustration will frequently be directed at the organization.
Loyalty and trust are intangible resources that contribute directly to an organization’s success. If your organization has a data breach that compromises credit card information for numerous customers, they will understandably not be happy to learn that their information may be out in the world.
How you respond to a breach contributes directly to how customer and stakeholder relationships are affected. Some clients and customers may cancel contracts, while others will adopt a wait-and-see approach, carefully monitoring and following up on your progress.
It’s hard to rebuild these intangible aspects that impact your organization, but it’s not impossible. If your organization has a disaster recovery plan in place, it’s important to incorporate communications protocols into your plans to help maintain these relationships.
Loss of Intellectual Property and Private Information
An organization’s intellectual property is highly valuable. IP is frequently carefully protected with highly limited access due to proprietary information or data.
As such, should your security be compromised, there’s always a possibility that your IP may wind up in the public eye. This can include blueprints for future products or facilities, specifications for a project, proprietary code, or proposals.
If this information is compromised, it can severely impact your organization’s competitive viability and profitability.
Data breaches are an all-hands-on-deck situation. As such, daily operations will frequently be suspended or paused until the situation is remedied.
While disaster recovery and business continuity plans can be implemented to mitigate this, the fact of the matter is that there will likely always be some sort of disruption to your operations. Timelines will shift accordingly, as security and damage control will normally take priority over everything else.
Damage to Property
In addition to the damage to trust and operations caused by a data breach, it’s important to note that the effects of cyberattacks can go well beyond data loss. It’s entirely possible that the breach may have caused damage to your systems through malicious code.
The damage to your IT systems may require significant investment, both financially and in terms of time, to fix what’s been broken. It’s not unheard of for attackers to take steps to make future protection harder. In many cases, not only is information lost to cybercriminals, it is frequently associated with corruption and deletion of data that has not been released.
Increased Financial Costs
It is very likely that addressing a data breach will require significant investment if preparations are not in place to mitigate potential loss. The dollar value of a data breach is easily the most visible and immediate cost to an organization. Beyond replacing and repairing infected and damaged systems, the cost of man hours, downtime and lost business, future insurance costs are also likely to increase.
A data breach sends a signal that an affected organization may not be trustworthy. This usually manifests in increased insurance costs, higher rates for loans, and a dip in credit score. These can all hamper an organization’s growth and standard operations in a big way.
All this is to say that a data breach or cyberattack must be taken seriously. There are far greater costs to your organization than a simple dollar amount. These attacks erode trust, which must be regained and rebuilt over time.
Thankfully, there are many steps you can take to ensure your organization can withstand and respond to these threats effectively. IDS ServiceGuard™ offers managed IT services to maintain your organization’s security needs, while IDS DataGuard™ provides near real-time data protection, and our consultancy offerings can help you develop a robust and secure IT infrastructure.
Data breaches are a serious threat, but preparedness and diligence are some of your best defences against these risks.