High Cost of Data Breach
vs. Investment In Preventative Cybersecurity Measures
Data is one of the most valuable assets for small and medium sized companies, which is why taking the proper steps to protect it is so critical. And as our reliance on technology increases, the risk of cyber attacks equally grows. Breaches from cyberattacks can be catastrophic, especially for small and medium sized businesses without the resources to shoulder the financial consequences. In this post, our industry experts share a window into the staggering costs associated with a data breach and contrast that with the relatively low expense of an affordable, flexible preventative cybersecurity measures.
The Soaring Cost of Data Breaches
Direct Financial Impact
The substantial financial impact of data breaches hits a company both directly and indirectly. These costs can be categorized into several areas:
1. Direct Financial Losses: The expenses related to investigating and containing a breach, recovering lost data, and compensating affected individuals for their losses are daunting. On average, a small or mid-sized company can expect to spend $38,000 to recover from a single security breach.
2. Legal and Regulatory Costs: Companies may face hefty fines and legal fees for failing to comply with data protection regulations, such as GDPR or HIPAA, and for failure to disclose a breach.
3. Reputation Damage: The negative perceptions from a data breach can be long-lasting. Customers often lose trust, leading to reduced sales, customer churn, and damage to a company’s brand reputation.
4. Operational Disruption: Data breaches can disrupt business operations, leading to downtime, productivity losses, and increased recovery costs.
In addition to the immediate financial impact, there are often less obvious but equally impactful costs of data breaches including:
1. Forensic Investigations: Companies may need to hire cybersecurity experts to determine the scope and cause of the breach.
2. Customer Outreach and Support: Informing affected customers can be costly, both in terms of communication expenses and potential credit monitoring services.
3. Crisis Management: Properly handling the effects of a breach and rebuilding trust with stakeholders requires considerable resources.
The Low Cost of Preventative Cybersecurity Measures
While data breaches can be financially devastating, the good news is that most breaches are preventable through proactive and relatively low-cost cybersecurity measures. Basic preventative measures include:
1. Regular Updates and Patching: It’s important to keep software and systems up-to-date to protect known vulnerabilities that hackers often exploit.
2. Firewalls and Intrusion Detection Systems (IDS): These tools help continuously monitor network traffic and block suspicious activity.
3. Encryption: Encrypting sensitive data both at rest and in transit can make it extremely difficult for unauthorized users to access valuable information.
4. Incident Response Plan: It’s essential to develop a clear and efficient plan in the case of an attack that can effectively minimize the impact of a breach if one does occur.
5. Security Audits: Regular security audits and vulnerability assessments will identify weaknesses before they are exploited.
The team at USX Cyber offers solutions that employ these safeguards and many others, in order to provide essential and accessible security for small and medium sized businesses. We welcome you to contact us for more information, to set up a free assessment or to discuss your company’s cybersecurity and compliance needs.