How Notifiable Data Breaches Can Affect Your Company’s Bottom Line
Around the world, regulators have introduced strict guidelines that determine how each organisation can use gathered data. This does not only affect larger scale organisations, but will have an impact on even the smallest company as business owners of all types try to take advantage of the latest and greatest technology.
Most companies use cloud storage to handle some of their data and rely on information technology in one form or another. After all, no business can afford to gloss over these tools if they are to remain competitive in the market place. While data harvesting can present many an opportunity, it can also represent a significantly increased risk, and this must be clearly understood.
It’s not sufficient to look at data protection simply as a hassle that must be addressed. It is far more important than this, as the consequences can have a significant impact on the bottom line of your organisation following a breach. So let’s take a look at this in more detail, and examine what real risks are involved?
When any business owner thinks of their bottom line, they will inevitably focus on dollars and cents. Yet this is only part of the risk associated with a data breach, and the organisation may face a potentially more serious and ongoing hit regarding their reputation.
Regulators are very serious about data protection and require each organisation to provide prompt notification in the event of an incident. These events will quickly become common knowledge in the marketplace, and when consumers become aware of a breach involving your organisation they may well decide to take their trade elsewhere.
There have been some well publicised events recently involving multinational organisations that lost hundreds of thousands of customers following data breaches. Other organisations have suffered similarly sharp decreases in their stock value, post event. While issues with the stock market are not necessarily of interest to the average small business owner, a widespread client exodus could prove to be fatal.
Don’t underestimate the hard costs associated with a data breach either. If you suffer an event that needs to be notified to the regulator then you will have to ensure that you introduce safeguards, technologies and procedures to fix this risk in the future. You will need to factor in the cost associated with this work as an unexpected overhead, and this will exacerbate any sales loss caused by the unwanted attention.
Don’t forget that regulators can impose a fine based on a percentage of your turnover if you’re found to be in breach of these increasingly stringent regulations.
Make sure that all your data is properly protected and handled in accordance with today’s rules and regulations. Commission an audit as soon as possible, so you can take action if needed and protect the long term viability of your organisation.