With cybercrimes reaching a new level of sophistication, data theft and ensuing criminal activities have rapidly escalated over the years. This has placed an increasing focus on data protection, and the responsibilities of businesses to safeguard data placed in their hands.
According to a report by Risk Based Security, 2019 saw a staggering 33% increase in data breaches. This doesn’t come as a surprise considering the number of high profile scandals that came into light during the year, from the Capital One data breach to compromised data of Facebook users.
What type of Business should Prioritize Data Protection?
Certain industries by nature of their businesses would handle large volumes of data. These could include social platforms such as Facebook that deals with billions of user accounts, online retailers such as Amazon, which stores large volumes of customer data, people search sites like Nuwber that build vast databases for background screenings, and credit bureaus such as Experian that again collate massive amounts of data for credit scoring reports.
However, it is not just these companies that need to be concerned about data protection. Every business, regardless of its scale, has valuable data that needs protection.
These can include formulas, patents, employee files, business contracts, customer and supplier databases, and marketing plans. And losing these data or allowing it to reach an outsider could place the company at severe risk.
Types of Risk
Here are some of the most typical risks a company could face due to compromised data.
- Business risk – corporate espionage is quite common, especially in highly competitive industries, and losing confidential corporate data, whether through theft or physical damage, could mean losing your company’s competitive edge. This could pose significant risks to the future growth and sustainability of the business.
- Financial risk – A data breach is estimated to cost a business $1.25 – $8.10 million on average and can include costs of ransom, legal fees, compensation, recovery of data, as well as replacement or restoration of damaged equipment.
- Legal risk – Many countries have implemented strict data protection laws to protect their citizens, and failure to protect stakeholder data could inevitably result in a lawsuit.
- Reputational risk – Customers, employees, and suppliers provide their personal information to a business with the trust of safeguarding them. When this trust is broken, it becomes very difficult for a business to repair it back to where it was. And the impact of this reputational damage could last for a very long time and could have a severe impact on their business growth.
The fact is, any business could become a victim of a data loss or theft, whether it is physical damage to equipment or a cyberattack by a criminal. This is why data protection needs to be a top priority, and the risks are too large to ignore.
So, if you still haven’t prioritized your data security, take effective actions today to strengthen your data protection initiatives. It is your responsibility to safeguard the best interests of your business, customers, employees, suppliers and all those who have placed their trust in you to protect their data.