What A Data Breach Could Cost Your Business
One hundred and thirty-six dollars. That’s the cost of the average data breach per lost record, according to the 2013 Global Cost of a Data Breach report by Symantec Corp. and the Ponemon Institute. Now $136 may not sound like a big deal. But when you multiply it by 23,647 (which was the average number of records lost per breach), the total average cost of each breach tops $3.2 million. That’s big money, especially for a small or medium-sized business.
If you’ve been putting off updating your network security for the sake of saving time and money, read on. As detailed below, failing to protect your IT from a possible data breach could hit your company’s productivity – and pocketbook – much harder than you ever imagined.
Once the personal or financial records of your employees, customers, partners or suppliers are lost or stolen from your business, your company will have to spend time assessing the scope of the breach, containing it, notifying affected parties, analyzing the cause, trying to recover data and possibly consulting outside IT and legal help. It’s all time and energy that could be spent on running and growing your business instead. (If you’re still partial to a dollars-and-cents approach, the Symantec/Ponemon report notes that the average U.S. firm spends $565,000 just to notify affected parties of a data breach. Ouch.)
All businesses have intellectual property they want to keep away from their industry rivals. Whether it’s your client list, the computer code for your social marketing app or the recipe for your store’s top-selling food item, losing insider information could hurt your competitive edge if it’s leaked online or sent directly to competitors.
Legal and insurance liabilities
A data breach could subject your firm to legal action from parties whose data was compromised. It may also put your business in violation of privacy laws or financial data regulations and increase the cost of your insurance coverage.
Nothing travels faster than word of mouth, and these days, negative news spreads even quicker on social media. A data breach incident can hurt your reputation among potential clients and cut into the trust you’ve built with existing customers, partners, and suppliers. The study by Symantec and Ponemon categorizes this under ‘lost business costs’ incurred after a breach; those costs also include abnormal customer turnover, increased customer acquisition activities and diminished goodwill. Although Canada wasn’t included in the report, the average ‘lost business costs’ per data breach were $3 million in the U.S., $1.9 million in Australia and $1.4 million in the UK.
The bottom line
Some businesses don’t bother to invest in protecting their IT from a possible data breach precisely because it’s only a possibility – they think it will never happen to them. Why pay to protect against a ‘what if’? But the Symantec/Ponemon survey serves as a valuable reminder of the importance of network security for all Canadian businesses. If you’re looking for a starting point to beef up your company’s security, consider a network security solution that offers you several features in one, like Bell Total Protection.
Which of these costs do you worry about the most in the event of a data breach at your business? If you’ve already experienced a breach, what was the biggest cost incurred by your company? Share your thoughts in our comments area below.