If your company uses, collects, stores or relies on first-party data (and what successful company these days doesn’t?), you face all kinds of security-related risks.
The facts are sobering: The average annual cost of a data-security breach for a company that misuses or loses data is $4.24 million, according to a recent IBM security survey, nearly 10% higher than it was before the pandemic. And that’s just the initial price tag. The real cost of a data breach cuts much deeper and can be existential: 60% of small- and medium-size businesses go bust within six months of a massive data breach.
Sadly, despite these statistics, most companies still don’t view data security as a top priority. If your company uses, collects, stores or relies on first-party data (and what successful company these days doesn’t?), you face all kinds of security-related risks that can make that $4.24 million seem like a bargain.
Here are eight ways a data breach could take out your company in a hurry.
1. Someone misuses the data you collect
Here’s a shocker: One in four data breaches is caused by employees rather than outside attackers. That’s important because your company is not just on the hook for securing data you collect; you also need to secure how it’s used. Thanks to the EU’s GDPR and California’s CCPA privacy laws, if someone in your company (or one of your partners) misuses your data, you face steep fines. And if you are fined 4% of the topline for simple data misuse, it could bankrupt your whole company.
2. Your data breach gets media attention
A data snafu at scale is a PR disaster. It erodes consumer trust in your brand and customers’ trust in your relationship. A recent PwC report found that 69% of consumers believe that the companies they use are vulnerable to being hacked, and 87% of consumers are even willing to walk away if a data breach occurs. And that doesn’t even factor in the pricey marketing costs of rebuilding a damaged reputation.
3. Data mishandling exposes you to regulatory action
That’s right, misusing data can open you up to a whole new universe of penalties, fines, sanctions and legal costs, which can be enormous and go on for years. You could easily spend a billion dollars addressing your case — just ask Facebook about that one.
4. A data breach costs you deals
This one hits you directly in the wallet. Once you have a security situation, current business customers can shut off deals. At the very least, you’ll spend countless hours documenting your processes and reassuring partners their data and reputation are safe. And if a data-security issue leads to a court action or some regulatory action, all your business customers now have reasonable cause to back out too. Which leads to this next one …
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