It might not be something you think about every day, but data security is a crucial element of your business. For SMBs and larger organisations alike, keeping data safe is vital – whether it’s your own data or personal information relating to your customers.

This data is highly valuable, and cybercriminals are continually developing new techniques to breach safety measures to steal it. As a result, it’s vital that your business stays on top of the latest security measures to avoid a data breach.

Breaches can be hugely costly to your business – not just in terms of the data lost, but also potentially devastating long-term consequences. It’s important to understand these consequences to drive home the importance of proper cybersecurity measures; the following are some of the biggest ways a data breach could cost your business.

1. Regulatory Fines

Failure to protect your customers’ data can lead to serious consequences from regulatory bodies. The exact details will differ depending on where your business is based and what statutes the breach falls under – for example, Australian Privacy Principles, Europe’s GDPR legislation, or federal data protection laws in the US.

However, the common factor is likely to be a fine or disciplinary action for failing to adhere to data protection guidelines. This can be very costly, especially to smaller businesses with fewer resources, so it pays to invest in cybersecurity measures to prevent breaches from occurring.

2. Investigation Costs

It’s often the case that how a breach occurred isn’t immediately obvious. In fact, it can often take a significant amount of time to realise a breach has happened in the first place – according to data from Verizon, 93% of data theft sees systems compromised in under a minute, but 80% of victims don’t find the breach for several weeks.

This illustrates just how difficult it is to find out how and when a data breach occurred. Investigating this is vital, though, in order to fix vulnerabilities and prevent future breaches. These long and difficult investigations can come at a significant cost.

3. Security Improvement Costs & Downtime

As well as spending time and money finding the causes of a breach, there are the further costs of fixing the vulnerabilities that the investigation finds. This could be a simple fix due to a small oversight, or it could be a much longer, more complex process necessitating a complete overhaul of your cybersecurity measures.

As well as the potential cost of implementing these changes, your business might experience significant downtime as a result if servers need to be taken offline. Your business could therefore face the double impact of having to pay for security fixes and losing working hours to operational downtime.

4. Long-Term Loss of Trust

Your customers entrust their data to your business with the expectation that you’ll keep it safe, and if a data breach demonstrates that isn’t the case, then those customers may turn to competitors they see as more secure. This loss of trust leads to a loss of customers and lost revenue, which can be difficult to recover from if you can’t recover your former reputation.

The Ponemon Institute’s Cost of a Data Breach Report 2020 states that lost business was the largest cost factor for businesses that experienced a data breach, accounting for nearly 40% of the average total cost of a data breach. The report cites increased customer turnover and the higher cost of acquiring new customers due to diminished reputation as two of the major factors in lost business.

5. Loss of Intellectual Property

This risk factor can be especially damaging for companies in the finance, legal, medical and engineering industries. It’s not just your customers’ data that could be stolen in a data breach – your own valuable or sensitive data may also be a target, such as contracts, reports, designs, blueprints or plans. This data could be held to ransom, sold to competitors, or even made completely public – all of which could incur large costs to your business.

Digital Security Best Practices to Avoid a Breach

Considering the wide-ranging and long-lasting costs of a data breach, it pays to stay on top of your business’ cybersecurity measures. Maintaining digital security takes time and effort, but it’s more than worth it to avoid a data breach. Here are a few important security principles to practice in your business.

One of the biggest vulnerabilities in your cybersecurity isn’t necessarily a flaw in your technology infrastructure; it’s the people operating it who present the biggest risk. For example, 60% of the 4856 personal data breaches reported to the ICO in the first half of 2019 were down to human error rather than flaws in security infrastructure.

This shows just how important it is to make sure your staff are properly trained in cybersecurity measures. Regular training, robust security processes and promoting good security habits among staff goes a long way to reducing the possibility of human errors causing security vulnerabilities.

One of the easiest ways for cybercriminals to access sensitive data is to use the password of somebody with access to it. Obtaining passwords could involve phishing, social engineering or even simple guesswork on the part of the hacker. If they’re successful, then your systems, networks and data could be laid bare.

To counter this, you should require your employees create strong passwords incorporating different character types and avoiding the use of easily identifiable information in them, such as dates of birth or phrases relating to the business. Even more effective is the use of Two-Factor Authentication (2FA), which requires the use of an authenticator app or an authorisation code sent to a separate device whenever you log in. Learn more about 2FA.

Hacking methods are constantly evolving, which means that security software needs to constantly evolve to match. It’s vital that you update your security systems and software regularly to keep on top of the latest fixes. Failing to install updates could lead to dangerous vulnerabilities for cybercriminals to exploit, exposing your business and your customers’ data to theft.

FocusNet Technology is a partner with KnowBe4, if you would like to implement a security awareness and training platform for your business start the conversation with us today.