A single data breach can amount to millions of dollars in costs shouldered by companies and consumers.
Aug 11th, 2014
In the wake of revelations about a massive password data breach conducted by a group of Russian cybercriminals, people are likely thinking about the costs and implications of such incidents. Although data breaches come in all shapes and sizes, it's important to consider just how extensive the consequences can be. In addition to the loss of information and obligations to reimburse or assist customers, organizations and their patrons face significant fallout from security failures.
Data breaches create hefty bills
According to a recent study by Authentify, a two-factor authentication provider, data breaches cost an average of $5.4 million once the extended consequences are taken into consideration, InformationWeek reported. For example, the cost of notification per customer is $5, which can add up quickly in large-volume hacks. Enterprises face lump-sum fines such as legal defense bills ($500,000), legal settlements ($1,000,000), and maximum fines ($1,000,000). Many of the expenses eventually impact consumers, the source added, with an estimated $140 billion in direct costs as well as indirect costs, such as higher taxes for law enforcement and monitoring.
The source also noted that higher insurance expenses and other costs resulting from data breaches are often eventually passed on to customers with raised prices for goods and services. While these outcomes may be a necessary fact of business, they can impact an organization's reputation and standing with its patrons. In short, taking precautions against these incidents is a critical step toward protecting customers and businesses alike.
Guarding against data breaches
The frequency with which cybercrime has been in the news of late may leave many pessimistic about their ability to prevent such an attack from happening to them. Although hackers and other criminals are becoming increasingly sophisticated in their methods, many incidents are preventable and occur as the result of employee error —such as losing a portable device.
For an organization that handles sensitive information, implementing a robust, comprehensive security plan that protects from all angles is imperative. In addition to enforcing password best practices, considering options such as two-factor authentication, installing the appropriate antivirus software, and educating employees about data security, entities should ensure they have the right tools in place to maximize their protection while supporting their productivity. Secure file sharing solutions, such as managed file transfer, facilitate intuitive workflows while keeping data safe and under central control.
In the end, there's no method that can guarantee safety from a data breach. However, with costs as high as they are, it's essential to make boosting security a top priority.