The threat of data breaches looms larger than ever before. With threats coming from every direction, it’s often a matter of when, not if a breach will occur. While the immediate financial impacts of a breach can be calculated, the long term consequences often extend far beyond the initial hit to the company’s bottom line. From brand and reputational damage to legal battles, the costs of data breaches are multi-faceted and can have a deep, lasting impact on the future of a company.
The true costs of a breach:
1. Brand Reputational Damage
Statistics show that 73% of consumers lose trust in a brand after a data breach. The erosion of trust in a brand can result in customer attrition, lost sales, and loss of brand equity. Regaining consumer trust is a daunting task, often requiring substantial investments in marketing and PR efforts.
2. Business Downtime
The aftermath of a data breach can disrupt normal business operations. The average length of downtime for a business after a breach is 18.5 hours according to IBM Security. Downtime translates to a loss of productivity, loss of revenue, and additional recovery costs.
3. Litigation and Regulatory Fines
Data breaches can lead to costly legal battles and regulatory fines. The global average cost of legal fees and settlement post-breach is estimated at $3.86 million according to IBM Security. Additionally, compliance and regulatory bodies often impose hefty fines adding to the overall financial burden.
4. Cyber Insurance Premiums
Cyber insurance premiums are already on the rise, and premiums tend to rise much further following a breach – often 30% or more.
The rise of ransomware attacks has driven some companies to pay ransoms to regain access to their data. However, this approach only further fuels the profitability and pervasiveness of cybercriminals and doesn’t guarantee data recovery. Nearly half of all ransomware victims (47%) paid the ransom.
Insufficient Security Staff
A shortage of skilled cybersecurity professionals leaves many organizations vulnerable to breaches. In fact, 51% of organizations say they lack the staff to effectively manage security (ISACA).
Investment in Security Measures
Proactive investments in security measures are critical for the health and longevity of organizations. Companies are allocating funds to threat detection, encryption, and monitoring to help thwart attacks, but most in-house teams struggle to staff to the level of talent needed
Incident Response Planning
Preparation is key. Companies are developing robust incident response plans to minimize the impact of breaches. The plans include steps for containment, recovery, communication, and post-incident analysis.
Get help from the experts
The costs of data breaches are exponential, and impact a company’s reputation, operations, and future viability. The evolving threat landscape requires organizations to adopt a holistic approach that combines technology investments with skilled personnel and proactive strategies. By understanding the true cost of data breaches, companies are more able to see the growing importance of their security investments. The cybersecurity experts at BCS365 can act as an extension of your team, arming you with the additional defenses your organization needs to stay safe.