As we move further into the digital age, breaches in cyber security are becoming more common and more harmful. In fact, 72% of businesses who have experienced a major data breach shut down within two years.
Who is effected by data breaches?
A breach can happen to any business, big or small. In 2013 US retail giant ‘Target’ was breached in November and December with 40 million cards affected – despite installation of 1.6million USD anti-malware software 6 months previously. The cost of this breach run into its billions. Furthermore their profit fell by 46% in the fourth fiscal quarter of 2013. This highlights how dangerous a breach can be, even to companies that have taken steps to avoid it.
Smaller businesses are also at risk of a data breach. Hackers can easily send an email containing a phishing link or malware, and without the necessary firewalls in place, all data is at risk. Although smaller companies are less of a target for hackers, a data breach can be something as simple as an employee leaving a laptop on a train.
Effects of a data breach on a business
Other than the potential of financially crippling a business, breaches can also have a destructive effect on brand reputation. According to a study done by the Ponemon Institute, data breaches can have as much of an effect on brand reputation as poor customer service. Furthermore, 74% of businesses have reported a loss of customers’ as a result of data breaches.
Intellectual property is also at risk when a data breach occurs. If a hacker steals ideas or blueprints then this could stop a business implementing plans and stunt future growth.