The losses go beyond lost sales, according to the source, businesses are forced to spend hefty funds on improved security measures by way of consultants, security vendors and test runs; not to mention the fees for lawyers, pending lawsuits and the payment of fines from data protection authorities.
There are a number of factors companies should keep in mind when it comes to calculating the actual cost of a future data breach.
Location, type of currency and company size:
The geographical location of your company has a great impact on the cost of any data breach. Currency can make a great difference due to its exchange rates. If you are a small shop that deals with limited (or no) customer data, the cost of a data breach may be significantly lower than what a larger corporation may experience.
Industry and type of data or records held:
The type of industry is the main factor that states that how bad a breach can impact. The type of data lost in a breach is one of the largest factors in what it will cost you. If you lose personally identifiable information (PII), sensitive customer data (like Social Security numbers), payment card information, private health information (PHI), will be destructive in payout. The more sensitive the record is, the more costly the breach will be.
Breach to business could slow, disrupt, or completely halt operations. For example, for a retail business, it could mean a loss in sales. In a service business, it could mean the loss of the ability to provide customer support.
After a security breach, an organization may want to double down on its security investments, which will come at a cost or need to pay off fines to partners and the government. Moreover, replacement of new software and hardware will be done, that’s really expensive though. And some organizations may realize they are understaffed with security professionals and need to hire a new IT professional, CIO, or CISO.
If you need to bring in a third party to investigate your data breach or even the FBI, these services will cost you up to six or seven figures depending on the size of the attack.
The fact is, size of the attack, organization’s nature and breach matters on how it will cost to an organization. However, we can reduce the breach cost by preparing ourselves prior and set a backup plan to resume business processes. Also, it’s clear that no matter how small the breach is, it will definitely cost enough to spoil an organization in term of money and reputation.