4 Serious and Damaging Consequences of Data Breach

The Lasting Consequences of a Data Breach

The cost of a data breach in your personal or business life goes deeper than simple theft.

Instead, think of a data breach as an earthquake that leaves immediate damage but then continues rumbling for days or weeks.

In the world of data security, this means damaging businesses’ reputations and creating tremendous financial losses.

Bearded cyberterrorist wearing a hoodie

Did you know that financial loss is only the beginning of these multifaceted consequences?

Beyond the financial strike, your company will most likely suffer from a disruption of all operations.

Though you may believe the data stored in your digital system is safe from theft, you’d most likely be wrong. The ever-growing breadth and depth of artificial intelligence offer small business owners and criminals alike the benefits of evolving technical opportunities.

Your internal technology will always have some vulnerable data, especially if you don’t continuously take advantage of cybersecurity AI systems.

These modern systems adapt to the endless, creative ways hackers can corrupt and steal your most private digital files.

Keep Your Small Business Safe!

Triada Networks can be your partner that will provide long-term protection!

We have more than twenty years of experience working with financial firms, so you can be assured that we’ll take care of your every need.

Raffi Jamgotchian Hedge Fun Cyber Security Expert

The Most Common Causes of Data Breach

Here are the top four sources that may lead to a data breach.

  • Cyber attacksMalicious hackers use cyber tools such as malware, phishing emails, skimming, and other social engineering techniques to steal your private information.
  • Loss of devices — If any of your devices are lost or stolen, you are vulnerable to a data breach. Hackers can access stolen laptops, smartphones, digital pads, thumb drives, and any other data storage devices.
  • Human error Every laptop or phone user can click on suspicious links. Sometimes, workers share sensitive data to the wrong email addresses or use the public internet in cafes, where hackers are standing by to steal data. Reports show 20 percent of all hacks are due to employee negligence. 
  • Employee data theft — Employees sometimes deliberately steal protected data with malicious intent.

Our IT experts will discuss the consequences of a data breach so you can start working on your new cybersecurity strategy as soon as possible.

Long and Short Term Consequences of a Data Breach

There are several long term and short terms consequences of a data breach, but the greatest consequence is loss of customer trust.

Always make sure to keep sensitive data secure and have the proper security measures to do so.

There are a lot of other consequences, so feel free to keep on reading!

1.) Financial Loss is a Given Due to a Cyber Breach

Any time a hacker steals your data, it is to blackmail you.

One criminal can sell your data or use your private information as part of an espionage scheme. In most cases, a cyber breach occurs for the criminals to make money.

business owners worrying about financial loss over data breach

Every day, 100 businesses in the US experience a data breach. IBM reports that in 2020, the average cyber breach cost just in the US was $3.86 million.

Beyond the actual company costs for a data breach, the employee-related consequences are also shocking. Employee morale will suffer when workers’ personal information has been hacked by cybercriminals.

Your business may need to stop operating for some time while your IT team or cybersecurity consultants shut the entire system down and rebuild it.

In some cases, there are also steep fines you must pay due to the hacking.

2.) Cyber Attacks May Create Client Loss

Every data compromise weakens a business’s brand, which leads to client mistrust. If customers don’t believe you are protecting them properly, they will leave. Simultaneously, your competitors may take advantage of the publicity surrounding your data breach and contact your customers to poach them.

The bottom line is that you will lose clients due to a data breach, so why wait for a breach to happen?

Smart businesses work on prevention, and you should, too!

legal implications of a data breach

Any time your firm has a data breach, you are open to legal issues. 

Any organization that collects and stores personal information such as names, social security numbers, home addresses, phone numbers, and other data is legally required to create and enforce “reasonable” data protection at all times.

Different states deal with legal liabilities for company data breaches in various manners, but the law requires firms to protect data and consumers’ privacy. Customers can even file class-action lawsuits against organizations that have failed to protect them.

The best thing to do is to plan a crisis response for cyber hacks now, implementing it in the event of a crisis.

But if your business gets hacked and you’re caught unawares, there are numerous things you can do to lessen the legal implications, such as:

      • Immediately notify your employees and clients.
      • Call your attorney and see if you need to pay fines.
      • Run a forensics investigation immediately. 

If you do not send a notice out to people involved, did not have a response plan ready, and do not immediately put new security measures, you may end up in litigation.

 

4.) Cyber Breach Can Create a Bad Reputation

One of the most frustrating things any business owner can experience is being a victim of malicious cyber actors while also being considered an unprofessional or weakly managed company. 

Though you are indeed a cybercrime victim, the public will likely not see it quite the same way.

A 2017 PwC study studied people’s reactions concerning cybersecurity, reporting that 92% of consumers agree that companies “must be proactive about data protection.”

Reputational damage due to a cyber breach is common and must be handled quickly.

Besides taking the steps of notifying clients and workers and creating a safer security system for your files, you also must take the time to reach out to the public and your clients.

Before any data breach, take the time to write a professional letter explaining all the immediate steps your business will take to rectify the problem.

Create a press release and send this out to local news, social media, and your website once it’s up and running again.

Takeaway

Now that you understand some of the heavy consequences your organization may experience from a cyber breach, we hope you consider hiring a professional cybersecurity team. If you implement cybersecurity measures as soon as possible, you will hopefully never have to experience the knotty aftermath of a breach.

Security costs, no matter how high, will help you avoid breaches, which will be much more profitable for your business in the end.

If you’re interested in proactively protecting your business from cyber danger, feel free to contact us.

At Triada Networks, we’ll provide comprehensive security across all of your systems at an affordable price.

Schedule a free consultation today!

Keep Your Small Business Safe!

Triada Networks can be your partner that will provide long-term protection!

We have more than twenty years of experience working with financial firms, so you can be assured that we’ll take care of your every need.

Raffi Jamgotchian Hedge Fun Cyber Security Expert

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