In today’s digital age, a cyber security breach is one of the worst things that can happen to a business. And with the number of cyber attacks on the rise, businesses need to be more diligent than ever in protecting their confidential data.
Here are five of the most dreaded impacts of a cyber security breach on your business.
It can Tarnish Your Business Reputation and Image
Did you know that most businesses that experience a data breach often suffer reputational damage? Customers and clients lose trust in their business when their confidential data is compromised. As a result, your business may see a decline in sales and an overall loss of reputation.
Cyber security breaches can also damage your relationships with other businesses. For example, if you store your clients’ confidential data on your servers and a breach occurs, they may hold you responsible and sever ties with your company.
The consequences of this can be far-reaching and long-lasting, affecting everything from customer loyalty to employee morale. In the aftermath of a breach, companies must work quickly and tirelessly to repair the damage to their reputation. Otherwise, they risk losing the trust of their customers, employees, and shareholders.
Loss of Important and Confidential Data
One of the most devastating impacts of a cyber security breach is the loss of important and confidential data. This can include anything from customer credit card information to sensitive company financials. In some cases, hackers may even delete or encrypt critical data, making it inaccessible to your business.
This can be incredibly disruptive to your business operations. It can also lead to hefty fines and penalties if the government regulates the data. For example, by losing customers’ personal information like social security numbers or birth dates, you could be subject to a class-action lawsuit. In the worst-case scenario, your business could be forced to shut down entirely.
The most common and direct impact of a cyber security breach is financial loss. U.S. businesses lose over $15.4 million every year due to cyber attacks. The loss can come in the form of stolen money, data or intellectual property, or damage to hardware or software. In some cases, the cost of recovery from a breach can even be much higher than the initial loss.
For example, if customer data is stolen, companies may have to pay for credit monitoring services or face legal action. If trade secrets are released, a company may lose its competitive edge. And if critical infrastructure is damaged, the cost of repairs can be astronomical.
It Results in Operational Downtime
When hackers gain access to your company’s network, they can disrupt business operations in several ways. One common way is by launching a denial-of-service (DoS) attack, which overloads servers with traffic and brings them down. This can result in significant operational downtime for your business, as well as financial losses.
Another common way that hackers can disrupt business operations is by encrypting data and demanding a ransom to decrypt it. This type of attack, known as ransomware, can also lead to significant operational downtime. Businesses often have to stop using affected systems while they work to recover their data.
Risk of Legal Action
If your organization experiences a third-party breach, you will likely be sued. Over 55% of companies that experienced a data security incident in the past year were hit with lawsuits. For example, common third-party breaches such as the 2017 Equifax breach have resulted in class-action lawsuits that can take years to settle and cost companies millions of dollars.
Even if your organization is not found at fault, the legal fees associated with preparing for and defending against a lawsuit can be huge.
Protect Your Business From Cyber Attacks Today
Cyber security breaches can have many devastating impacts on businesses, from financial losses to operational disruptions. In the worst-case scenario, a breach could even force a company to shut down entirely. That’s why securing your business from cyber-attacks should be among your top priorities.