You will be surprised to know that 93% of successful data breaches take place in less than one minute.
With the advent of new technologies, data breach and identity theft cases are growing at a rapid speed and can cost an organisation millions of dollars.
There are several ways a data breach can affect your company.
Let’s find out:
1. Financial loss
As per 2019 study, the average cost of a data breach is $3.92 million globally across SMBs?
Whether small or large, data breach can be extremely costly for your business and can result in a huge economic loss.
When a data breach occurs, the victim company has to pay for
Security: Expenses associated with new cybersecurity technologies
PR costs: The aftereffects of data breach often involves huge spending on PR and marketing tactics to repair the company’s reputation and bring back lost customers.
Regulatory fines: A business has to inform partners and customers about data breach. If any business fails to comply with these laws, it will have to pay regulatory fines.
Apart from above, there are many expenses associated with data breach that can cause a financial strain.
2. Negative impact on brand reputation
Customers are the most valuable asset of any organisation.
If data breach exposes their confidential information in public, it can result in a loss of their trust from your company and can further erode your brand reputation.
A company with a bad reputation has to face many issues including:
Struggles to find financial support
Loss in business relationships
Less or no sales
Impact on the supply lines or investors
3. Less productivity
One of the most prominent effects of data breaches is the decrease in employees’ productivity.
For instance, in case a ransomware attack occurs, employees can’t access the data, network, systems and anything they normally use to perform business tasks.
Every unproductive hour for businesses can bring a huge financial loss.
4. Legal consequences
If a data breach reveals your customers’ personal data, such as credit card information, your company may be subject to legal penalties or fees.
For instance, as per the Australian privacy law, an organisation involved in data breach is bound to pay compensation to the victims.
For instance, in 2016, the search engine company, Yahoo revealed two major data breaches incidents that took place in 2013 and 2014 and affected nearly 1 billion user accounts.
5. Affected business operations
If not handled on time, a data breach can do lasting damage to your company and can negatively affect business operations.
While large businesses manage to recoup their losses, small and medium businesses, unfortunately, may have to shut down all operations until everything is recovered.
It further leads to significant customer and revenue loss.
In the end…
Data breach is a serious issue and companies must understand its consequences and take necessary steps to alleviate its risk.
So, it’s better to hire a professional paper shredding company in Perth that follows the best methods to discard your sensitive records.
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