What Could a Data Breach Cost You?

Business owners are told over and over to increase their security on their websites or face the consequences. Too many don’t heed this advice, though, even though security breaches shut down firms on a regular basis.

It’s vital to speak the language that businesses speak: money. Security breaches can lead to serious revenue losses that can be impossible to recapture.

Definition of a Data Breach

Before looking at the costs, you may need to understand what constitutes a data breach. The rules may vary by industry, since some deal with far more sensitive information than others.

A data breach involves a loss of information in which sensitive, protected, or confidential data has been lost, stolen, or put at high risk. Such breaches can occur through employee error, online hacking, malware, and other attacks — both accidental and purposeful.

Ponemon Institute Data Breach Statistics

The real cost of a data breach is best illustrated by a look at the statistics. Every year, IBM’s Ponemon Institute conducts a study that totals the average consolidated costs of a data breach and its effect on various countries and industries.

Ponemon Institute researchers looked at 10 months worth of data from 2016 to arrive at their results. This year, the total cost of a data breach amounted to more than $4 million.

On average, the consolidated amount per lost or stolen record averaged about $156. Globally, it’s estimated that more than 10,000 records will be lost or stolen over the next two years. The statistics should unnerve anyone, and they continue to grow.

Lessons to Be Learned Here

For large corporations, $156 per record may be fairly easily absorbed by their contingency fund. But small and mid-size businesses could have a more difficult time recovering from such a hit.

Regardless of your organization’s size, there are some clear lessons to be learned from the Ponemon Institute’s findings from the past decade. Here are a few of the most important:

  1. Proper Website Security Is Essential

Websites should be properly secured, but many aren’t. Based on research, we know that 86 percent of all websites have at least one serious vulnerability.

This shows organizations aren’t taking the proper steps to secure their business sites, where their data is often most vulnerable. A huge step in securing a website is to use SSL encryption.

This is the standard security technology that will ensure a secure web server. Read reviews to determine the best SSL security for your organization’s needs.

  1. Data Breaches Are Biggest Financial Loss

Reportedly, data breaches can be, and often are, the biggest expense organizations of any size will face. They have the potential to shut a business down, and they have been the killer of many businesses in the past. According to the Boston Computing Network, 60 percent of small to midsize businesses shut down within six months of their data loss.

If the risks are mitigated, however, the cost will be much lower. Proper prevention tactics are vital to reducing the risk of a data breach.

Organizations have to recognize that the longer it takes to catch and contain a breach, the more costly and damaging it becomes. Training, security measures, attorneys on retainer, and other preventive measures can significantly reduce your losses.

  1. It’s Worth the Investment

Obviously, investing in data loss prevention will probably be costly. But it will be one of the best investments you can possibly make. Don’t think of it as throwing money away but as an opportunity to protect yourself from serious losses in the future.

A major finding in the Ponemon Institute study was the vast reduction in costs for the companies that recognized the risk of data loss and took steps to prevent it. Through data loss prevention technologies and proper training, a firm can protect itself against the largest risks the organization is ever likely to face.

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