Technology’s rapid growth has made data protection more important than ever today. Every day, companies gather, handle, and store sensitive data like personal, financial, and commercial data of their customers and clients. When some of these unfortunate companies get affected by data breaches, it can lead to financial losses, legal responsibilities, and reputational harm. In this blog post, we will discuss the risks and repercussions of data protection neglect which actually goes far beyond just dollars.
According to IBM, the average cost of a data breach in the US was 9.44 million USD compared to just 4.35 million USD global average. Even more shocking was its finding that for a whopping 83% of companies, a data breach isn’t about if it will happen, but rather when. These are just some of the statistics that highlight the importance of data protection. The actual risk is far greater and multi-leveled.
What are the risks involved?
Data protection is important for every company that’s digital, which is more or less almost every company today. The following are some of the ways any business can suffer if it fails to deploy adequate data protection measures:
- Financial Losses: The biggest risk that weak data protection raises is financial losses. Data breaches can cost firms millions of dollars in investigations, legal fees, and compensation. Then there are also indirect financial costs from a data breach that includes business and consumer confidence damage.
- Legal Obligations: Data breach penalties that can be imposed by global regulators such as HIPAA and GDPR and local regulators include fines, legal fees, and compensation claims. Furthermore, organizations may face criminal prosecution for data protection violations.
- Reputational Damage: Data breaches, especially those involving personal or financial data, can greatly damage a company’s reputation. Once the damage is done, it can be a herculean task to reverse it. Customers are becoming more conscious of data privacy issues and are inclined to switch providers if they don’t trust them.
- Loss of customer trust: Customers expect companies to protect their data and will avoid companies with bad data protection records. Customers may also be less reluctant to share their data with firms, limiting their ability to collect and use data to expand business.
- Disrupted operations: When a data breach takes place, an organization may need to shut down systems or services to control the breach and assess the damage. When that happens, downtime, decreased production, and higher expenditures can eat into a company’s profits and cause harm in different ways.
It’s evident that disregarding data protection can harm organizations on many levels; Ignoring data protection risks financial losses, legal liabilities, reputational damage, and customer trust. Thus, organizations must develop strong data protection policies and invest in appropriate technologies and training.
How to protect sensitive data?
A company must take multiple data protection measures to minimize the risk of cyber-attacks and data breaches. There are many affordable and simple options available for the same, some of which are:
Secured Access
Strong access controls that restrict data access to job-related users play a key role in protecting sensitive data. These controls and policies ensure that employees have access to only the data they require for their duties. To enable and improve these controls, you can also use two-factor authentication and data encryption.
Employee Data Security Training
Data security knowledge is generally seen to be weak among employees. As a result, some employees may leak sensitive data inadvertently by taking the wrong action. By mandating regular data security training for staff, this threat can be contained to a large extent. It involves teaching staff about phishing, password hygiene, secure browsing, etc.
Encryption and anonymization
Encryption is a data protection technique in which sensitive data is converted into a code only authorized parties may decrypt. This prevents unauthorized access to confidential data. To further secure sensitive data, companies can also use anonymization methods such as data masking tools.
Updated software
Hackers often exploit software weaknesses to obtain sensitive info. To prevent exploits, companies must routinely update and patch their software. This covers operating systems, software, and company-used third-party software.
Regular security and risk audits
Security audits and risk assessments can help firms identify data security issues in their operational infrastructure. These audits can reveal poor access restrictions, outdated software, and training needs. So, companies can prevent breaches by periodically completing these checks and identifying potential concerns.
DLP Tools
To ensure that sensitive company data remains saved on company networks, companies can use Data Loss Prevention aka DLP tools. These programs monitor network traffic, email, and file transfers to prevent sensitive data from getting out of the firm. DLP solutions can also implement data encryption before the data is sent out of the enterprise network.
Bottom Line
We live in a time when companies of all sizes and industries have to prioritize data security. As instances of data leaks and cyberattacks have increased, you can’t afford to compromise with data protection. By emphasizing awareness and deploying the best DLP tools available in the market, a company can prevent damage to both reputation and capital.