What will your next data breach do to your business? This is a question I ask readers of Information Age, where I contributed an article on the importance of understanding the impact of a data breach. An understanding of the risks and consequences of a data breach is key to planning appropriate security measures.
While companies such as Ashley Madison get a lot of mainstream coverage for data breaches due to the controversial nature of their business model, other companies, large and small, face their own dire consequences. When we talk about the fallout of a data breach, it’s not just the press coverage, or even lengthy investigations and fines from a variety of regulators, there can be lasting repercussions that seriously affect how a business operates.
In the article, I discuss how data breaches can:
- Impact employee morale and trust at all levels of the organization
- Have financial repercussions including loss of revenue, compensating employees, fines from multiple regulators and possibly even drawn out legal costs associated with class action suits
- Result in data paralysis, out of fear that data-led initiatives will lead to more breaches. It can take months to years to get past security concerns in a real way, at which time competitors may have charged ahead
- Cause reputational damage that may be impossible to overcome for some, such as with Ashley Madison. We’re even seeing these trust issues affect public agencies, as my colleague recently discussed
While there’s no doubt that an actual data breach can have lasting and costly outcomes, even the threat of a data breach can cause organizational paralysis. The fear of a data breach, and sensationalized news stories, can cause knee-jerk reactions in security planning that can leave true risks unaddressed or could result in further vulnerabilities.
To tackle these challenges, we advocate for a holistic approach to data, incorporating data policies, staff training and layers of data protection technology. Your staff needs to know what they’re permitted to do with the data, the measures they need to protect it, and that there is a procedure in place that can limit the impact of the breach, should one occur. If you understand the real impact of a data breach, and your specific risk profile, your organization will be better prepared to safeguard themselves.