As our dependence on computers and the Internet has grown over the last couple decades, data breaches have moved from being an abstract concept, most believed would never happen to them to a real risk every business must prepare for. Each year the cost of a security breach reaches new heights. For 2019, IBM and the Ponemon Institute estimate the average cost to be $3.92 million. That’s a 12% increase over the past five years. Depending on what country or industry you operate in, your cost could be lower or almost 3 times as high. With numbers this high, the financial cost of a data breach are surely enough to make any CFO sit up and take notice. However, these are not the only data breach effects business leaders need to know of. Believe it or not, some can even be more damaging than the monetary losses.
Other Data Breach Effects No CFO Can Afford to Ignore
- Loss of intellectual property – This can be easily become one of the costliest effects of a data breach. As you’re aware, your ideas and plans are your most valuable asset. If someone steals them and your competitor beats you to market with the new product or service you were planning, the future of your business is in peril.
- Legal issues–If someone steals customer data your company instantly becomes subject to legal trouble. This will not only affect your finances, but for a public company, also your stock price and ability to attract new investors. Worse yet, legal battles could drag on for years. And, handling these takes your focus away from the day-to-day operations of your business causing productivity to suffer.
- Loss af trust – This one is a natural extension of the last. Once customers find out someone took their personal information, not only is it likely that legal battles will ensue, your customers’ trust in you will also either be severely damaged or lost altogether. Repairing your reputation will be a long and expensive process. Often it takes hiring a crisis management consultant to help you manage the situation. Even then, if the data breach is severe enough, it can be impossible to undo the damage fully.
Because data breach effects can be so far-reaching, CFOs and others responsible for their company’s sensitive data must do everything they can to avoid falling victim.
A Few Simple Steps You Can Take to Keep Your Most Precious Assets Safe
- Develop and stick to a plan for how to manage your company’s data security.
- Educate each employee on their role.
- Limit who has access to sensitive information.
- Insist on strong passwords and change them frequently.
- If security is not one of your business’ strong suits, consider putting your most important data in the hands of someone who is, rather than keeping it in house.
Learn more about data breach effects and how to keep your company from falling victim. Download the white paper, “Technology Challenges of the Modern CFO, Keeping Your Company’s Data Secure.”
Have questions? Want to talk about moving your business data off that on-premise server to somewhere more secure? Contact us. We have over 30 years’ experience helping businesses manage and protect their data.