Due to the ever-growing threat landscape in the digital ecosystem, your business must embrace cybersecurity irrespective of the size of the company. The statistics regarding data breaches on all business sizes show that the aftermaths of the data breaches are even becoming worse.

According to IBM’s recent security survey, the average cost of a data breach rose from $3.86 million as was in the previous normal years to $4.24 million in 2021. This marks the highest average total cost of a data breach ever reported in history. Revenue loss impacts are significantly lower for organizations with a more mature cybersecurity posture. And higher for organizations that have not prioritized some areas such as cybersecurity. IBM’s report elaborates that it takes organizations an average of 287 days to identify and contain a data breach. This is seven days longer than in the previous reports. This means that once an organization was hit on February 1, it took 287 days on average to identify and contain. The breach wouldn’t be contained until November 14.

The continuation of teleworking, the isolation of employees and the current vaccination situation have increased the playing field for attackers to practice successful social engineering schemes on staff that are not educated and well prepared to respond to such schemes.

“Malicious attackers take advantage of the health crisis to craft targeted emails in order to divulge sensitive information from key staff at different levels of information access. With such carefully-tailored strategies, cyber-attackers are becoming more agile and sophisticated and increase the effectiveness of their actions,”

There have been reported cases of email compromises, malware infestation, accidental information leakages, supply-chain and or third-party breaches, insider breaches. These are some of the common issues that organizations are facing today.

Given the weary security landscape which involves intellectual property risks and client or staff data. Cybersecurity should be embraced as a must to one and all. It is a necessity in today’s time because a major chunk of business activities has gone online. Remote working has made the lives of staff easier and in some ways boosted productivity. It has widened the digital ecosystem hence extending risks from controlled environments to uncontrolled personal environments. Large organizations may have the budgets and capacity to manage endpoints but the SMEs may even go bankrupt trying to pay for incident response against a cyber-attack and or penalties of non-compliance. There can be a huge loss of revenue resulting in business disruption.

What you need to know?

Given the times, leaders need to take action now to prevent cyber-attacks from occurring. Leaders should structure policies, procedures and guidelines in place and be prepared for future incidences.

As a leader, you need to evaluate the current security posture with a risk assessment. Check for holes where attacks can creep in. And develop an effective incident response plan to mitigate the far-reaching effects of a cyber-attack.

Three areas that need urgent attention after data breaches.

Any data breach towards an organization will target three different areas of the business. That is to say; the revenue of the organization, customers and the Organization’s reputation. The impact of the data breach may differ based on the organization.

The impact on Revenue and finances:

The ever-growing cybercrime in organizations has overburdened businesses with huge costs and greatly impacted the revenue of businesses. IBM reported in its Data breach report of 2021 where the study was conducted on 537 real breaches across 17 countries, regions and 17 different industries. It was concluded that on average, a data breach occurrence cost USD 4.24 million.

Once hit by a data breach, there is always a financial implication for the organization. This depends on the nature of the data breach. Organizations hit with a data breach struggle with costs from containing the breach, compensating affected customers, comprehending a decreased share value and heightened security costs.

Financial losses resulting from security breaches have been significant in past. Yet business leaders cannot forecast how or if financials will be affected in the event of a breach. Studies have proved that 29% of businesses that face a data breach end up losing revenue. Out of which 38% of organizations experience a loss of 20% or more and are unable to sustain the situation.

The impact on Customers

For customers to confide in what services an organization offers and their willingness to purchase the services will depend on the way an organization prioritizes its customer’s ‘information security. Thus, if an organization does not consider the security of customers’ data, a customer can vote with their feet and take their business elsewhere.

Back in the days when customers lacked awareness of cyber security, they could not form any perception on the basis of the security plan of an organization. But now, with increased awareness and increasing cyber-attacks, customers are more conscious about where they are providing their information and how safe it will be in future.

The scale of data breaches is what continues to shift the attitude of a customer. To say, Data breaches on giant firms like Marriot, Facebook, attract the attention of the public to data security concerns. Previously, data privacy was difficult to internalize, it was difficult to care about because it hadn’t directly affected people. Over 533 million users accounts including personal emails and contacts were found on hacker websites after the Facebook recent hack. And over 5.3 million guests records were stolen in the Marriot data breach scandal between mid-January 2020. Over a decade, Data breaches have been impacting customers at a large scale. But the interconnected nature of systems now makes news spread so fast. Hence impacting the trust of customers and hindering the reputation of organizations.

Impact on Business Reputation:

In the world of a rapidly scaling digital ecosystem with close networks and super-fast news, any information regarding data breaches spreads so fast over the internet or media. At times an organization makes news headlines not for its best performance in the industry but for its security being compromised due to poor security. The reputational damage a data breach can impose on a business can be severely demoralizing, especially if the breach was unavoidable or when there is a compromise of customer data. Dark clouds of poor reputation might take a toll causing loss of customer confidence, negative press, associated identity theft, and potential customers’ views, creating long-term complications.

Breaches can have long-lasting effects on organizations; according to the Forbes Insight report, 46% of organizations had suffered damage to their reputations and overall brand value because of a data breach. Even breaches from third-party vendors created reputational/brand damage 19% of the time.

What organizations should do to mitigate the risk and reduce the impact?

The best way to mitigate risks and reduce their impact on businesses is to invest and prepare ahead of time, and have plans in place for incidents that do occur

With all the attention pointed at an organization after a breach, it’s crucial to ensure that the aftermath management is in place and is properly handled. If not, there can be a potential risk of losing the customers to the competitors who pose their service with a better security plan for customers.

Some of the best ways to prevent incidents from having an outsized impact on the business include;

Have an Incident Response Plan in place: To reduce the aftermath of a data breach, organizations must have an incident response plan and engage in effective threat-modelling. There should be a thought-out and actionable plan so that the post-breach response can be as effective as possible. The plan enables the response team to execute the steps necessary and understand the nuances involved. With tight controls and protocols in place, teams can quickly respond to incidents. And this will help reduce the impact of a data breach.

Involve a legal entity early and often: The most efficient way to reduce the cost and reputation impact is to involve the Legal in the process earlier. The legal is in the best position to understand notification requirements and coordinate the response process. Performing post-incident analyses help identify and uncover weaknesses in the defences of the organization that can help inform security needs.

Have methods in place to strengthen consumer trust: With a customer-driven industry, placing customers’ trust at risk might prove very insecure for the organization and its reputation. And leaves the company at risk and puts its reputation in a dilemma. A risk assessment can be performed to verify the preparedness of an organization towards a data breach. It also sets out the right steps to be taken towards minimizing potential threats

Conclusion

Careful data breach aftermath planning, well-thought-out analysis, and a tailored response can mitigate the risks of and impact incidents. These ensure the most positive outcomes for your organization and the customers you serve.