May 05th, 2013
Data breaches are an unfortunate reality for virtually every business operating today. Countless organizations of every size and industry have been the victims of data breaches. Whether the result of hackers, insiders or sheer accident, these incidents can cost firms thousands, even millions, of dollars, not to mention the less tangible consequences.
Recently, the potential implications of data breaches were highlighted by a major cyberattack directed against LivingSocial.
A significant breach
The social service network and daily deal website has acknowledged the exposure of information concerning approximately 50 million accounts. The exposed information includes names, email addresses, dates of birth and encrypted passwords. LivingSocial emphasized that no credit card data was accessed in the attack.
However, simply because customers' credit card information was not exposed does not mean that these individuals are free from the risk of suffering financial consequences, as The Conversation contributor Bruce Baer Arnold pointed out.
"In the world of big data, a criminal can do substantial harm by integrating data that appears to be trivial," Arnold wrote.
Notably, cybercriminals can use this data to commit identity theft and fraud, and in this way indirectly cause financial problems for those affected by the breach.
As significant as the consequences of the data breach may be for LivingSocial's customers, the impact will likely be even greater for the company itself.
"For the business, [the attack] is a tremendous confidence shaker, as it likely will lead to people becoming more reluctant to use this service," said Kirk Nahra, partner at Wiley Rein, Bloomberg BNA reported.
As more reports of the impact a data breach may have on individuals continue to emerge, the general public is becoming increasingly sensitive to these issues. This means that a firm which suffers a public data breach will likely find that potential customers look elsewhere, as they do not trust the organization to protect their personal information.
According to Nahra, because the LivingSocial Breach is large, it may have a wide-ranging impact beyond those immediately affected.
"These kinds of breaches also can have a broader impact on internet commerce in general, putting pressure on all businesses to beef up their security and address potential customer concerns," he explained, Bloomberg BNA reported.
When the public hears of a data breach of this scope, consumers will likely become more suspicious of the data protection strategies demonstrated by every business, not just those with a history of breaches.
This raises the question of how firms can go about improving the quality of their data protection strategies. And while there is no definitive answer to this question, one of the most important steps businesses can take is investing in high-grade secure file transfer solutions. A dedicated secure file transfer tool can ensure the integrity of even big data sets while they are being moved from one environment to another, thereby greatly improving the company's overall data protection measures.