Reducing the Risk of Severe Data Breaches

The frequency and severity of data breaches are increasing at an alarming rate. According to a recent Check Point study, the number of cyber-attacks against enterprises globally has increased by 50% yearly. The study further revealed that organizations face 925 cyber-attacks every week globally, growing the number of data breaches. 

While such incidents happen within minutes, identifying the breach and measuring the magnitude of damage it costs is a longer story. As the risks of data breaches increase, it has become mandatory for organizations to understand how damaging data breaches are.

How Serious is a Data Breach? 

Data breaches are undoubtedly serious. They result in consequences like leaking sensitive data, identity theft, or loss of intellectual property and reputation. Here are some of the particularly severe issues they can cause:  

Financial Loss

A major effect of a data breach is the potentially enormous financial losses it causes to victim organizations. The average data breach cost was $4.24m in 2021, which rose by 10% from 2020 and is estimated to increase further.

Businesses that suffer from a data breach are liable to pay the costs incurred. This includes compensating affected customers, investigating the attack and taking reactive steps to contain the breach.

To limit financial loss, it's vital to detect data breaches appropriately. In 2021, the average time to detect a data breach was 212 days, and it took 75 days to contain it. If data breaches are identified and contained earlier, the damage costs would be lower.

Data Loss

Data breaches result in the loss of sensitive personal data, such as passwords, IP addresses, login credentials, biometric data and other financial information, which has devastating consequences.

For example, Antheus Technologia, a Brazilian biometric company with expertise in the development of fingerprint identification systems, experienced a breach that exposed 76,000 unique fingerprint records. There are 2.3 million data points that can recreate the original fingerprint by using the reversed engineering technique.

Biometric data is valuable to cyber-criminals and any incident that leaks this information is hugely damaging and causes significant financial and reputational losses.

Legal Ramifications

Organizations are legally bound to follow industry regulations, like the GDPR and CCPA, to maintain data protection and privacy. According to these laws, companies must use online security tools like VPNs to ensure data security and privacy. If a data breach hits the business, individuals can take legal action against the company for failing to protect their data. As a result, companies can bear hefty penalties and lawsuits that impact their reputation. 

For example, recently, Twitter faced a lawsuit by the Federal Trade Commission (FTC) and Department of Justice (DOJ) and agreed to pay a $150m fine. The social networking site used its members' email addresses and phone numbers for targeted advertisements. However, it claimed to comply with the EU-US and the Swiss-US Privacy Shield Frameworks that restrict how companies can repurpose user data. 

Essential Tips to Reduce Risks of Data Breaches 

Given the prevalence and severity of data breaches today, businesses must take steps to protect themselves and reduce the risk of such an incident. Here are a number of steps that they can take: 

  • Improve the organizational security posture by planning and introducing security policies that help minimize the risks. 
  • Invest in a cyber-insurance program as it helps recover losses incurred during a breach and helps businesses improve their reputations.
  • Organizations need to limit data collection and sensitive information about their customers. Try to collect only relevant data, store it for a limited time and don't allow any unauthorized entity to access it. 
  • Perform network security vulnerability assessments as these help find opportunities for improving security. 
  • Organizations should consider using AI and ML-based systems to detect anomalies within their network infrastructure.
  • If employees use their personal devices for work, ensure they use encrypting software like VPNs or antivirus software. 
  • Businesses must comply with the required data protection and compliance laws. 
  • As 81% of data breaches occur because of weak or misused credentials, ensure that employees follow strong password management practices across all their accounts.
  • Educate and train your employees about protecting sensitive business data. Encourage them to report security risks. 

Final Thoughts 

As the threat of data breaches continues to rise, it's becoming increasingly critical for organizations to take the necessary steps to control them. A data breach has a devastating impact on organizations regardless of their size. Creating security policies and educating employees regarding data protection are the two best ways to prevent data breaches. 

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