There are hidden costs to data loss that extend beyond the literal cost of the data and even a court official fine.
These significant cost factors of a data breach are often overlooked, but give a much more accurate portrayal of the scale of damage to the business, if you are not properly protected. So says data protection firm GuardianEdge.
The firm is warning UK businesses that the ‘aftershocks’ of data loss are creating far greater financial repercussions than the replacement value of the hardware and software itself.
To help businesses prepare and protect against data loss, GuardianEdge has singled-out the top five factors that are overlooked when businesses evaluate the financial impact data loss has on a company:
Extra staffing and postage costs needed to track down and notify customers or employees affected by a breach
Legal expenses, both on an advisory level and representation, if an affected person or group seeks reparations
Repair to a damaged reputation – the cost of crisis management to regain the trust of customers if data is lost or if confidential information is leaked
Refunds and compensation – any settlements that need be paid to customers whose data has been put at risk or who need to be refunded as the service has been interrupted due to loss of data
Compliance fines for failing to meet the criteria of regulations such as Sarbanes Oxley when audits discover essential data is missing
Recent studies suggest that publicly traded companies that disclose information security breaches could see as much as a five per cent decline in their average share price – and that these losses in market value could persist for several months, the firm adds.
What they say
“In an age of mobility, data is replicated onto so many devices that enterprises have become extremely vulnerable to data loss. This has been proven with Nationwide’s recent high profile data breach,” said Lynton Stewart-Ashley, channel sales director for UK and EMEA at GuardianEdge. “The loss of any computing device that holds either company information or sensitive consumer information can have ongoing aftershocks for a business’ reputation and bottom line – creating a total cost far greater than most anticipate. It is not just the value of the lost hardware that needs to be taken into consideration, but also the knock-on effect it has on every part of the business,” added Stewart-Ashley. “Businesses need to get smart about fully protecting access to their information on endpoint computing devices. Encryption of data will prevent data from being exploited, even if the worse happens and it gets into the wrong hands."
Users of the company’s encryption software include Lockheed Martin Corporation and Deutsche Bank AG.
