A successful cyber attack on your business can affect your bottom line, your brand reputation and consumer trust. As the efforts of cybercriminals increase in sophistication and the number and scope of data breaches grow, it becomes more important than ever to try and prevent them.
An attack on your business is an attack on your clients too. With cybercriminals mining and sharing leaked or stolen data, protecting your organization and your customers from cyber breaches is critical. The consequences are too damaging to ignore.
Compromise of client data
Data is increasingly valuable to a business, especially data related to customers and payment. Your clients trust you to protect their personal data. There are also data protection and privacy laws that require you to keep it secure. If this data is compromised because you haven’t used appropriate security measures, you are likely to face regulatory sanctions and fines.
Knowing what causes a data breach is the first step to preventing one. Unfortunately, one of the main causes is human error. All an employee needs to do is unwittingly open a malicious attachment to an email to download ransomware onto a firm’s computer system.
Just some of the costs you may incur as a result of a data breach include:
- IT forensic costs
- client notifications
- PR expenses
- legal fees and fines
Plex, a media server app used by millions, suffered a cyber breach in August 2022. It resulted in the personal encrypted data of customers being compromised. This included passwords, usernames and emails.
Preventing a cyber breach is better than trying to deal with all its implications. Perception Point offers advice on why email security is so important and what to look for in an advanced email security solution.
Erosion of client trust
Beyond the financial impact, the loss of customer faith in your business can cripple it. Trust is essential in a customer relationship. You could lose customers and sales as a result of a cyber breach, and if you have a small to medium business, you may even have to close your doors. Most consumers won’t buy from a business if they don’t trust their security practices.
Facebook may be one of the most popular social media platforms in the world, but it has suffered its share of privacy issues. The most recent attack happened in 2021 and affected over 500 million users. Other large companies that have suffered from repeated data breaches include Amazon, Dropbox, Twitter, and Microsoft. These companies have all managed to survive, mainly due to taking extensive measures and spending a great deal to recover from the breaches.
An impact on client services
Any business that accepts online debit and credit card payments has a target on its back. Cyber thieves often intervene at the point of payment, whether through stealing card data or redirecting users to a fake checkout.
Smaller businesses who feel that they aren’t at risk may fail to prepare, and this leaves vulnerabilities for hackers to exploit. Downtime after a cyber attack and the loss of client data affects all client services. Employees can’t help clients with their issues if they don’t have data at their disposal.
Class-action lawsuits
If you are guilty of compromising personal client information, they may decide to go the legal route and sue you. This can even lead to a class-action lawsuit. It doesn’t matter whether you didn’t have bad intentions – those affected expect compensation. In the past decade, numerous well-known companies have faced class action lawsuits for violation of data privacy laws. The settlements have reached well into the millions, with Uber paying $148 million and Morgan Stanley $120 million.
Clients leave
A 2019 Verizon survey found that 69% of respondents would avoid a company that had experienced a cyber breach. Nearly 30% said they wouldn’t visit that business again. Tech companies and financial services have higher than average churn after a cyber breach.
FlexBooker, an appointment scheduling service, suffered a massive data breach in December 2021. Roughly three million users were affected. The cybercriminals accessed sensitive data such as driver’s licenses, ID information and photos, posting them on various hacker forums. They accessed the system by exploiting its AWS configuration, and once inside, they installed malware on the servers. Various professionals such as accountants, consultants and lawyers left the platform after the breach.
If you can demonstrate to customers that your company has a strong history of using best practices for data security, it can help to minimize churn.
Take a proactive approach
If you want to promote your business online, such as a consumer goods business, you need to keep the client’s personal information secure. This means you need to continually assess your risk profile and be proactive about managing your defenses.
- Do you back up all important data and information regularly? Regular backups reduce the likelihood that critical data is lost in the event of a cyber attack.
- Are your employees regularly given cyber security training? They need the training to help them recognize suspicious links in emails etc., and prevent them from visiting phishing sites. Educating your employees about how cybercriminals can take advantage of human error can help them to change their behavior.
- Have you implemented ‘least privilege’ user permissions? This means giving employees the lowest level of user rights they need to do their jobs.
- Do site administrators log out of programs and systems straight after completing tasks? If they don’t, it opens the door to malware which can result in data losses.
- Have cybersecurity experts tested your systems?
Experts can evaluate your systems and work with insurance and breach response service providers to reduce the damage of a breach, minimize costs, and help you to recover sooner.
Conclusion
Whether you’re a small or medium-sized business or a large corporation, you are not safe from the threat of a cyber attack. To keep your data secure, it’s imperative to take a proactive approach and develop a comprehensive cyber security solution.
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