Data breaches, although not common, pose a serious threat to businesses and their confidentiality. But just how is a business affected by one, aside from the massive loss of data? The consequences can be devastating and, in some cases, some never recover.
The most damaging effect of any breach of confidentiality is the financial cost. This can involve anything from paying back any money stolen from the business as a result of the breach to compensating customers whose data was stolen. That’s not even covering any potential fines you may incur as a result.
Share value may also plummet and you will have to invest in stronger security measures to make sure it never happens again. In short, damage control is expensive and preventing further incidents even more so. This is why it is important businesses invest in proper security measures from the beginning.
Another blow could be a severely damaged reputation. Nobody will put trust in your business anymore if they know your security measures allowed a data breach to occur. This also contributes to your share value, meaning other businesses are less likely to invest in you.
Existing customers may also take their custom elsewhere, feeling that their data is unsafe in your company’s hands, while potential new customers will be driven away. This adds to the financial difficulty as this will have a significant effect on your turnover.
An often-overlooked side effect of a data breach is the lowered morale among members of staff and the board of directors as a whole. The lack of new business and the financial strain will only make the working environment more stressful which can lead to decreased motivation and lower work output.
Some staff may even need to be made redundant due to the gigantic financial blow a data breach may incur which only serves to lower morale further and decrease productivity. All because of insufficient methods in protecting data correctly.
When it comes to protecting confidential data, it all comes down to GDPR. Find out how you can stay compliant by visiting our page.