Finance

More Than Money: The Real Cost of a Data Breach

Did you know that the average cost of a data breach is currently $3.86 million? Of course, that figure can send anybody reeling.

And depending on the severity of the breach, it could leave you posting an “out of business” sign on your door. Not literally, of course. But you get the point.

It could be enough to take your business down. 

Yet, even if you are able to recover financially, there are other casualties of a data breach you may not have considered.

What Constitutes a Data Breach?

As defined by the Department of Homeland Security, a data breach is “the unauthorized movement or disclosure of sensitive information to a party, usually outside the organization, that is not authorized to have or see the information.”

Before the advent of the modern digital workplace, data breaches weren’t much of an issue. As technology has made our lives more convenient though, it has also made businesses prone to cyberattacks.

Millions of people are adversely affected by data breaches each year. And the numbers are expected to rise as hackers get more sophisticated. That’s why it’s so important to have IT services and consultants who know the distinct ins and outs of technology.

Otherwise, you could experience the following.

Disruptions to Your Operation

A data breach can easily shut down your operations altogether.

If the breach causes your business a complete loss of critical data, there will be ample time and resources required to recover that information. The usual course of action is to cease operations completely until a solution is found. This also allows for time to investigate the source of the breach.

But the longer you’re shut down, the more likely you are to lose customers. That’s just Business 101. 

Loss of Credibility

When you hear about a company experiencing a data breach, how inclined are you to do business with them?

Even existing clients can be gun shy about continuing to do business with a company if they don’t feel their information is safe while in their possession. 

You know how long it takes to build customer trust and how essential it is to maintain it. One data breach and all of that work can easily go right out the window.

This is especially true for small businesses. And recovery is much more difficult.

Legal Ramifications

If you think that the $3.86 million figure is harsh, consider this. The estimated cost of Target’s data breach is $162 million

A chunk of that high ticket price was the tens of millions of dollars paid out via class-action lawsuits and settlements. On top of that, they had to commit all of the time and pay the legal fees associated with all of those payouts.

Plus, with a data breach, some businesses find they are also legally restricted from performing certain operations while legal investigations are underway. This can have long-term consequences. 

Avoid the High Cost of a Data Breach

It’s obvious that the cost of a data breach goes beyond the financial repercussions. So stay vigilant on the tech side of your operations with top-of-the-line IT services. 

It’ll be worth every cent.

And for more great advice and tips that’ll keep your business running optimally, check out the rest of our blog!

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