You’re running a business in the relentless age of digital innovation, and heavily rely on data to complete operations. From business development to market research and customer service, you use data to your advantage to make informed decisions, stay competitive in the industry, and improve your services. Unfortunately, your reliance on data also comes with a great caveat – your business could be vulnerable to data breaches. Cyberattacks are characterized by exposure of critical data, theft, and unauthorized access to information, which could only mean the worst for your business.
Keep in mind that this is the age of information, and it’s crucial to gain the audience’s reputation and trust. A data breach could cause lasting and severe damage to your business’s success because it would negatively impact it on multiple levels.
Keep reading to learn why businesses should prioritize data security and prevent data breaches.
What is a data breach?
Before explaining the detrimental consequences of a data breach, it’s essential to understand what it is. Cybersecurity experts define it as the unintentional or intentional release of private, sensitive, or confidential data, usually from an organization’s records. Often, a data breach will expose critical information about individuals, like their login details, social security numbers, or contact details. Data breaches are a form of cyberattack and allow hackers to use sensitive information to harm individuals and companies.
Small and medium companies are the most common victims of data breaches because they neglect to prioritize cybersecurity, focusing their attention and resources on other areas. Large companies typically invest more in cybersecurity and have several lines of defense to prevent hackers from accessing their sensitive information, but smaller organizations are quite vulnerable.
Preventing data breaches is paramount because they can hurt a brand’s reputation and affect its evolution in the long run. According to studies, 19% of buyers would stop purchasing from a retailer that was the victim of a data breach.
But what leads to a data breach?
Data breaches happen when one expects the least because malicious entities wait for the perfect moment when data is left unguarded and take advantage of a company’s weak data protection systems. Hackers use diverse mechanisms to access sensitive information, and the companies that neglect to update their security protocols suffer the most.
Here are the main mechanisms cybercriminals use.
Malware – malware attacks usually spread fast and can infect your company’s entire network in a couple of seconds. Most business runners have the misconception that attackers target only big brands, but they usually focus on small businesses because they are more vulnerable and lack the necessary tools to defend themselves against this kind of danger. But this shouldn’t be your case; you should seek IT support in Los Angeles to create a cybersecurity plan that protects your business.
Phishing – everyone has heard about phishing, but as a business runner you might think you’re safe from this kind of cyberattacks because it usually targets big companies. Bad news is that hackers use sophisticated phishing techniques to reach corporate victims and manipulate employees to expose sensitive data. This method also allows them to install malicious files or software on your devices without anyone noticing.
Outdated system – all tools and software age. You might have purchased them when they were considered cutting-edge, but as the years passed, technology advanced, and hackers developed intricate systems, your tools would never track. The best way to protect your company against a cyberattack is to hire MSP in Los Angeles to optimize your security infrastructure and ensure your software functions accordingly.
And data breaches are bad because……
Data breaches take a toll on a company’s finance
Data breaches have immediate financial consequences, and organizations cannot postpone dealing with them. The expenses associated with a data breach include investigating the extent of the event, responding to the incident, compensating the customers affected, investing in new security systems, regulatory penalties, and legal fees. And the consequences don’t stop here because data breaches usually affect a business’s valuation and share price. For example, the well-known company Yahoo dealt with a data breach in 2013 which affected its value when Verizon purchased it.
Data breaches cause reputational damage
Data breaches have a negative effect on a company’s reputation because the public often refuses to do business with a brand that was the victim of a data breach. They have several alternatives they can choose from, so they won’t put themselves at risk again. When clients’ information gets into hackers’ hands due to a company’s negligence, they will use all available tools to share their experience with other people. Social media is the most used medium to vent anger with a company.
Data breaches could lead to operational downtime
This kind of cyberattack will disrupt operations for an undefined period because the situation demands the business to contain the breach and investigate the extent of the event. It’s mandatory to figure out what systems were compromised in the process and this might imply shutting down the operations until the company gets the necessary answers. Operational downtime negatively impacts a business’ revenue and makes it challenging for a company to recover financially.
Data breaches lead to the loss of sensitive data
The loss of sensitive information has devastating consequences for a business because the details could be used to identify a client. Hackers usually target credentials, IP addresses, credit details, and other similar data that allow them to benefit financially.
Organizations tend to gather unnecessary data about their clients, and if they fail to protect it efficiently, they become vulnerable to scams and data theft. Cybercriminals would use any means to access sensitive information and sell it to scammers. Cyberattacks have become more common among small businesses over the last few years, and it’s crucial to understand how a data breach could impact your operations so you can protect your company effectively.
Also Read: The Critical Role of Phishing Awareness Training in Preventing Data Breaches
