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Yes, Data Breaches Are Bad for Your Organization. Here’s Why.

by Erik Briceno

“Data breaches are bad.” This could probably sum up every cybersecurity article that’s ever been written in the past 10 years. But do you fully understand why they’re bad?

Even setting aside the personal ways they affect everyone involved on an individual level — even setting aside the fact that they could allow a nation state threat actor to steal and commit espionage against U.S. government contractors — they have the potential to severely disrupt, if not outright destroy, organizations and enterprises of all sizes. With October officially being designated Cybersecurity Awareness Month, in today’s article we list the various ways data breaches can harm your company and why cybersecurity needs to be moved to the forefront of everything you do.

Data Breaches Cause Financial Loss.

The sheer financial cost of a data breach is likely one of the most immediate and apparent consequences that organizations of every size will be forced to deal with. According to a recent study, the cost of a data breach has risen 12% over the past five years. These costs can include compensating those who have been affected, the actual response efforts, the investigation of the breach itself, new security measures and legal fees. For those who operate outside the United States, there’s also the steep penalties that come with non-compliance with the General Data Protection Regulation. A breach can also significantly impact a company’s share price and overall stock value.

Finally, reputation can mean everything in business. Research has shown that up to a third of customers in retail, finance and health care will stop doing business with organizations that have been breached. Additionally, 85% will tell others about their experience, and 34% will take to social media to vent their anger. All of these factors together add up to a major impact on your brand and your company’s bottom line.

Data Breaches Cause Downtime.

In the aftermath of a data breach, business operations are heavily disrupted. Organizations need to contain the breach and conduct a thorough investigation into how it occurred and which systems were accessed. Operations may need to be completely shut down until investigators get all the answers they need. This process can take days, even weeks, depending on the severity of the breach. This downtime can have a drastic impact on a company, and even potentially put some people out of work entirely.

Data Breaches Lead to Lawsuits and Even Criminal Charges.

Yes, Data Breaches Are Bad for Your Organization. Here’s Why.Under data protection regulations, organizations are legally bound to demonstrate that they have taken all the necessary steps to protect personal data. If this data is compromised, whether it’s intentional or not, individuals can seek legal action to claim compensation. And attempting to hide a data breach is even worse. It was just this past August when federal prosecutors charged the former Uber security chief with obstruction of justice for hiding a 2016 data breach from Federal Trade Commission investigators.

While to this day the responsibility still falls largely on the consumer to keep their data secure, this may no longer be the case in the very near future. The question then becomes whether or not you’re prepared for the fallout should you disregard your obligation to cybersecurity.

 

Since 1995, Manassas Park, VA-based V2 Systems has employed local systems administrators, network engineers, security consultants, help desk technicians and partnering companies to meet a wide range of clients’ IT needs, from research, to implementation, to maintenance. Concentrate on your VISION…We’ll handle the TECHNOLOGY!

ebriceno
About ebriceno
Erik Briceño is the owner of V2 Systems, Inc., one of Northern Virginia’s leading Information Technology Managed Service Providers. He is an inspiring leader for its employees and instrumental business partner for its customers. He is passionate about V2’s purpose, dedicated to exceeding expectations and a consummate professional not afraid of jumping in and getting his hands dirty. Prior to joining V2 Systems in 2002, Erik was a co-founder and COO of Ampcast.com, a leading provider of online resources servicing over 5,000 independent musical artists. At Ampcast.com, Erik spearheaded all aspects of corporate development, funding, strategic vision, and business development for the firm. From 1997 to 1999 Erik held the position of Acoustic Systems Engineer for Electric Boat Corporation, a leading defense contractor. In this role, Erik was responsible for the acoustic fidelity of two noise critical systems and components in the US Navy’s nuclear submarine systems. Erik holds a B.S. in Mechanical Engineering from Vanderbilt University and a Masters of Business Administration from George Mason University. When not working, you will find Erik a dedicated family man, raising two young children with his lovely wife Karen. Together, they enjoy building legos, playing baseball, skiing, riding horses, swimming, traveling, and fixing up old Mopars.
Yes, Data Breaches Are Bad for Your Organization. Here’s Why.
Yes, Data Breaches Are Bad for Your Organization. Here’s Why.