It is a well-established fact that data breaches can be devastating for the affected businesses. When a data breach occurs, organizations typically lose at least one of these three assets: money, intellectual property or sensitive client data. While the first category causes the most direct loss, breaches in any of these areas will have a major, negative impact on the targeted companies.
The scope of this impact can be seen in a new report, which found that data breaches and fraud are increasingly linked, and undoubtedly causing untold damage to firms' reputations.
The report, conducted by Javelin Strategy and Research, found a direct correlation between data breaches and incidents of fraud over the course of the past three years. Among tracked data breach victims in 2012, 23 percent later became the victims of fraud, according to the study. In 2010, by comparison, only one in nine data breach victims experienced problems with fraud.
"What this tells us is criminals are relying more often on data gleaned from these breaches to commit fraud," explained Al Pascual, a senior analyst for security, risk and fraud at Javelin and co-author of the report, NBC News reported.
Pascual added that more than half of all fraud victims are also data breach victims, the news source noted.
The report pointed out that while cybercriminals continue to target credit and debit card numbers, as these can be used to immediately purchase items illicitly, these cyberattackers are now increasingly shifting their focus toward Social Security numbers or other identifying information.
Karen Barney, who works for the Identity Theft Resource Center, told NBC News that those who have their identifying information stolen may experience long-term consequences.
"When a Social Security number is compromised, it can haunt you for years to come," she said, the news source reported. "You're always on alert and you have to be constantly vigilant."
Obviously, such an experience will leave a very bad taste in the mouths of those affected. A consumer whose sensitive information is stolen from a particular company will almost certainly avoid patronizing that firm again in the future. More important, that individual will also likely share his or her experience with others, both in person and over the internet, ensuring that the company will lose current customers and struggle to attract new ones. Trust is a critical component in any business relationship, and firms that experience major data breaches almost always lose a great deal of the public's trust in the process.
Considering the direct and indirect consequences of experiencing a data breach, it is unquestionably in every firm's best interests to do everything possible to avoid such a fate. And while any data protection strategy will inevitably feature a wide variety of components, one of the most critical of these is acquiring the right tools.
For example, firms of all sizes should consider investing in secure file sharing solutions. With these tools in place, employees can easily and quickly send and receive sensitive corporate files without increasing the risk that this information will fall into unauthorized users' hands. Such solutions are particularly important due to the fact that businesses are increasingly adopting bring-your-own-device (BYOD) policies, in which employees are permitted to use their personal smartphones and tablets for work-related purposes.
Without the right data protection tools in place, BYOD can pose a major threat to corporate data security. Secure file sharing solutions allow firms to take advantage of BYOD's advantages without increasing the risk of a devastating data breach.