You’ve probably seen the stats by now: data breaches can be massively expensive. The average cost of a breach in 2021 was $4.24 million globally, and for US companies that figure shoots up to $8.64 million (in 2020).
No matter the size of your business, the financial costs of a data breach are concerning enough to get serious on your digital security. But the financial costs aren’t the sum total of what you’ll deal with in a breach. In fact, they’re only a small piece of the puzzle.
Data breaches cause far more damage than just the monetary sort. Consider these hidden (and not so hidden) costs that you’ll face if your company goes through a data breach this year.
First, if you encounter a data breach, you will with near certainty lose some of your clients. Your clients are expecting you to keep their information secure, and some of them will take a breach as serious enough to move on to a competitor.
As a result, you’ll have to deal with the monetary costs of repairing the damage from the breach — but you’ll have to do so with less money coming in. It’s a double threat: fixing the damage is mission-critical if you want to stop the client losses, but the money to do the fixing is in some cases literally walking out the door. It is clear that the hidden costs of a data breach go far beyond the monetary fines and settlements.
Think about your business model and your unique selling propositions. For many businesses, trust is somewhere in that mix. It shows up in mission and vision statements (“to be the trusted leader in…”), and it’s implicit in the purchase decision in many contexts.
Think about whatever amount of trust you’re demanding — explicitly or implicitly — from your customers. Are they trusting you with their money? Their health or health information? Are they trusting you when you say your product is the best or safest?
When you suffer a data breach — especially of the sort that could’ve been avoided with better security practices — you don’t look all that trustworthy. Some of your customers will wonder, “If I can’t trust them to keep my data or information safe, how can I trust them in other areas?”
It may not be possible to put a dollar value on this lost trust. But rest assured, it will make an impact.
Some breaches simply steal your data, which is problematic enough. But others, especially malware and ransomware attacks, can directly attack your operational ability. These attacks can slow down your network or even lock you out of critical systems entirely.
We saw this with the Colonial Pipeline ransomware attack, where the company could not deliver oil for a period of five days. Numerous local governments have similarly been shut down for days or weeks, unable to provide services that required accessing their networks.
Maybe your business doesn’t collect data of critical importance. You might be tempted to think, as a result, that a security breach isn’t worth worrying about. But consider the costs of having your operational ability hampered, slowed, or stopped entirely.
The costs resulting from lost customers and lost trust would be had to calculate. In some industries, you could be subject to fines and fees as well. And in certain fields like healthcare, such attacks could threaten health and even life.
No matter what your company makes, does, or sells, cybersecurity matters — because of both the hidden and not-so-hidden costs.
If you’re uncertain about your current levels of digital security or are looking for a new or better managed IT partner, Blue Ridge Technology is here to help. We have the depth, experience, and tools to lower business risk and keep your business secure.